Such a service would certainly ratchet up the rivalry between Google and Amazon, both of which declined to comment on the service. Google has been reaching deeper into Amazon's cozy e-commerce market, offering an online bookstore that competes with Amazon's popular Kindle Store and courting major brands for its Google Offers and Google Wallet mobile payment service. Amazon has leveraged Google's Android platform to build the Kindle Fire tablet designed to undercut existing Android slates in the market. Forrester Research analyst Sucharita Mulpuru told the Journal Google's move would be "ridiculously expensive," because Google would have to subsidize shipping costs.
Piper Jaffray analyst Gene Munster, who has calculated that Amazon's spend $90 for each of its Amazon Prime customers who pay $79 a year, said a Google delivery service is unlikely to have much of an impact on Amazon's sales. Google's service would include shopping carts for each retailer. Google is pushing back with the quick-shipping service, and some retailers are interested in signing up for it, said people familiar with the matter. The competition between Google and Amazon was long invisible to most consumers, with Google focusing on Internet search and Amazon on selling all manner of products and shipping them to people's doorsteps.
In the past year, Google has begun challenging Amazon by selling digital media, including books, directly to consumers. Amazon, meanwhile, has become a destination for product searches, with many online shoppers making their initial searches on its website, instead of through Google. Over the past year, Amazon has consistently handled between three and four times as many product-related searches on its site as Google has through its product-search service, according to research firm comScore Inc. Sameer Samat, vice president of product management for Google's commerce initiatives, declined to comment on the quick-delivery plan. An Amazon spokesman also declined to comment.
Google hopes to launch the service sometime next year, the people familiar with the matter said. To succeed, she said, Google would have to subsidize the cost of the shipping because most online shoppers today expect free or cheap shipping. Google hopes the quick-shipping service will attract more consumers to its product-search service, increasing the revenue it gets from product-related ads on the search site, according to people familiar with the matter. "If I'm an Amazon Prime user, I go to Amazon first and Google second," said Scot Wingo, chief executive of ChannelAdvisor, which helps retailers sell on Amazon, eBay Inc. and other websites. "That's bad for Google." Last year, Google also launched special visual-recognition technology to help shoppers find apparel, or "soft goods." Google's fast-delivery effort also would put it in competition with eBay, which in the past year has acquired companies that provide retailers with an inventory-listing system and with a product-storage and shipping service.
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