I have been reading and thinking about the latest edition of the ecommerce cold war between Google and Amazon.
Google has approached retailers about creating a “buy” button for its online shopping site that would be similar to Amazon’s popular “one-click ordering” feature, according to people familiar with the discussions.
It is becoming increasingly clear to me that Google has serious concerns over the ambitions and dominance of Amazon in product search. Bill Gurley made a very interesting point in a recent interview on Bloomberg (video) where he said that Eric Schmidt said the following when asked about their biggest competitor:
If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo or Qwant, the new French search engine. But more likely you’ll go directly to Zalando or Amazon, where you can research models and prices, get reviews, and pay for your purchase all at once. Research by the Forrester group found that last year almost a third of people looking to buy something started on Amazon — that’s more than twice the number who went straight to Google.
For one thing, these companies are each others’ biggest competitors, because in tech competition isn’t always like-for-like. Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon. They are obviously more focused on the commerce side of the equation, but, at their roots, they are answering users’ questions and searches, just as we are.
The context is important here – Schmidt was talking to a European audience at a time when he was defending Google’s business to European legislators whom are currently looking at Antitrust cases for Google’s various businesses. The point is that Amazon was until this conversation never publicly mentioned as a search competitor for Google huge search index.