Maybe Amazon Will Just Put Google Out Of Business Now, Because Why Not?

Boy, this wasn’t a great day for Google in terms of news.

Midway through the session, the Wall Street Journal reported that hundreds of thousands of users might have had their private Google+ data exposed. Once they (Google) figured that out, a decision was apparently made not to disclose it for fear of exacerbating regulatory concerns and damaging the company’s reputation.

Minutes later, Google announced they’ll be shuttering Google+ for consumers.

Needless to say, that doesn’t bode particularly well from a trust perspective at a time when America’s tech giants are under fire for data misuse and it also comes amid accusations that Google deliberately programs algos to bias search results against conservative media.

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Later Monday, CNBC reported that advertisers are abandoning Google in droves in favor of Amazon. That, according to what the network says are the accounts of “execs at multiple media agencies”.

Specifically, CNBC’s reporting indicates that some advertisers are shifting “more than half” of their advertising budget to Amazon from Google.

There are of course all manner of caveats (obviously some brands are more amenable to Amazon than others) but it looks like the whispers CNBC is hearing do in fact reflect shifting preferences, even if Google doesn’t yet see an epochal shift. For instance, one unnamed Google ad sales manager is quoted as follows:

Leadership is definitely concerned but [it’s] not a huge threat right now.

The article is based on conversations with higher-ups at a half-dozen media agencies, all of which told a similar story about the extent to which Amazon offers a more straightforward experience. Consider this excerpt:

Another said clients appreciate Amazon is a seamless shopping experience. Using a Google search ad to lead to a purchase may require a person to set up an account and input their credit card information with a separate website. Especially for smaller brands, there’s not really an advantage between selling direct to the consumer versus selling through Amazon.

Clearly, this is all related to Amazon’s dominance in consumer goods and it makes sense. Why not just advertise where consumers actually spend?

That gets at the heart of the whole thing: Once Jeff Bezos expands into enough categories to where he can realistically say that if you want it, you can buy it on Amazon (whether it’s consumer goods, services or whatever else), it’s not entirely clear why everyone wouldn’t just advertise with him. Here’s CNBC underscoring that point:

Not everything is sold on Amazon — yet. Large advertising categories like auto, travel and some entertainment, including ticketed events like movies or sporting events, still don’t conduct direct sales on the platform. Those companies don’t have any reason to advertise on Amazon, while Google search still drives a lot of direct sales.

You can be absolutely sure that Bezos will “correct” the “problem” of “not everything [being] sold on Amazon” sooner or later. And when he does, there’s going to be a helluva value proposition for advertisers who want to seamlessly integrate efforts to drive sales on a platform where they are already selling to customers who already have an account.

The only way for Google to mitigate that eventuality is to partner with retailers and create some kind of integrated experience of their own (which they’ve tried to do with Google Shopping), but the idea that they’re going to be able to compete with Bezos on his own territory seems laughable.

And see, that’s the rub for everyone who isn’t Jeff Bezos: You have no hope of competing with him on his turf, but he continually encroaches on yours, often so successfully that he drives you clean out of business.


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One thought on “Maybe Amazon Will Just Put Google Out Of Business Now, Because Why Not?

  1. The only tiniest little problem is that he doesn’t generate profit. Bezos is akin to Catch-22’s Milo Minderbinder, who bought eggs for five cents and sold them for three – making up the difference in volume. Google is a real company with real profits and a hoard of cash for moonshots like curing death and faster than light travel or whatever. Amazon stock trades at a p/e of over 145, and if/when it actually raised prices to justify its stupid valuation, then the government will come in and break it up into Whole Foods, AWS, Zappos, Twitch, Amazon Music, etc.

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