When Google was busy playing startup, Amazon stole their lunch.

By — Star Republic
12.07.2020
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  • When Google was busy playing startup, Amazon stole their lunch.
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Competition is rising, even for the long unthreatened number one search engine Google. When we talk about the company from California it is usually in the form of a search engine. A search engine that is such a natural part of our everyday lives that it even has become a natural expression - "to google something”.

But let’s be honest. It’s been a long time since Google was only a search engine. Today it is an advertising company threatened by explosive competitors such as Amazon in the west and Tmall and Baidu in the east.

Currently, there are more product searches in the US through Amazon than there are on Google. Just a couple of days ago it was also announced that Facebook is introducing the new service Facebook Shops targeting struggling small businesses.

For a long time, Google has tried to develop new business areas that have not been in their original portfolio, such as Google Plus, Google Car, Google Glass, Stadia to name a few. This has been done to expand the product portfolio and gain a larger market share outside of the core business. But one cannot help to wonder, with this constant pursuit of new market areas, did Google actually lose ground on their home turf while not paying full attention?

Google's core business is being threatened

Since it is primarily different types of ads and sales that drive today’s Google, the company has started somewhat of a direct conflict with themselves as they are gradually moving traffic away from their own site when the ads in themselves become successful. Companies are paying Google to generate traffic, but now Google doesn’t always want users to leave. How do you keep users on the website, but still get other companies to pay for ads on Google.com? A tricky equation.

One example of how Google is trying to tackle this is the way they act when a user searches for a flight. If you, for instance, google a flight to Alicante you will be provided with the possibility to not only search, but also book your flights directly from Google, instead of being forwarded to a travel agency. Apart from earning money on ads, Google now also makes sure that the user never leaves the search engine until you actually pay for the flight. So in this case, Google is putting the revenue from the actual booking before the revenue of letting Momondo or someone else get that traffic via ads. Same goes for movies as Googles premier its own content before for e.g IMDB.

Even though this all sounds like quite a successful way to develop their business strategy, numbers show that Google is gradually losing its top position in some of their vital segments. Currently, as said above there are actually more product searches being made in the US through Amazon than there are on Google. And now Facebook Shops will probably be the next new player starting to catch up with the giant.

Google Marketplace has been one of the biggest ways to help boost your sales and advertise your products. But the platform is struggling, to say the least, as of late and are constantly losing ground against mainly Amazon. Lately, Google has even made their Marketplace free to advertise on in the US, an offer which will be rolled out in the rest of the world during 2020. In my opinion this can only be seen as a way to counter the threat of Amazon and Ebay.

Any cookies left for me?

Ok, so now we’ve heard all about how new Marketplaces affect Google and are changing the search engine/transaction landscape. But how does this “battle of search” affect you and your online business?

Well, with the constant change going on, and with new disruptive players entering and changing the market dynamics it is harder than ever to stay relevant and know what your customer wants. Before, you were competing against other e-commerce sites to get the highest ranking on Google to get as much traffic as possible and reach that desired top ten result page. Now you will also have to compete with Google themselves for that traffic as well. Especially if they keep developing the “travel” example shown above into other product segments, but also with Amazon, Facebook Shops and other Marketplace actors growing stronger by the day.

2020 has so far been a great year for e-commerce (and a bad year for a lot of other reasons), but time will tell if we more than ever just need to put less focus on SEO and simply create an Amazon account…

This is a gigantic topic and I will address it further in a series of more specific blog posts. As the saying in Sweden goes - to eat an elephant, you need to first divide it into smaller parts.

Please stay tuned to to your closest Star Republic channel to make sure you don’t miss out!

Author

Niclas Rudolfsson

Competence Lead Marketplaces
Product Leader
Star Republic

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