EcommerceBytes-NewsFlash, Number 2687 - December 02, 2011 1 of 3 
Google Eyes Shipping Network to Compete with Amazon Prime
By Ina Steiner
The Wall Street Journal said Google is planning to launch a shipping service to compete with Amazon Prime. Google's service would let consumers shop for goods from online retailers in its network and receive orders within one day for a low fee. Amazon's optional Prime membership program costs $79 for a year of free 2-day shipping, or 1-day shipping for $3.99 per item. The Google service described by the Journal sounds similar to ShopRunner, and the revelation may have analysts wondering why eBay gave away majority control of ShopRunner when it acquired its parent company GSI Commerce.
The Wall Street Journal explains that many consumers start their shopping searches on Amazon rather than Google, and that's causing Google to lose out on ad revenue derived from product searches. The newspaper cites ComScore data that shows Amazon has consistently handled between three to four times as many product-related searches on its site as Google does through Product Search. Not only that, but Amazon is building its own advertising business on its marketplace.
"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," the Wall Street Journal wrote.
According to the report, the shipping service would be tied to Google's Local Availability feature. That's a program in which chain stores such as William Sonoma, Eastern Mountain Sports and Columbia Sportswear Company share their in-store product assortment through Google Merchant Center so searchers can see which local brick-and-mortar stores carry the items they want. Google also offers Google Places so local businesses can make sure they are seen by individuals in their area.
The move could impact eBay, which is testing a fulfillment service for sellers that competes with Amazon.com's Fulfillment by Amazon FBA service.
As part of its deal in acquiring GSI Commerce, eBay spun off ShopRunner and flash-sales site Rue La La, retaining only 30% because, eBay CFO Bob Swan told analysts, if eBay tried to realize RueLaLa and ShopRunner's opportunity, "we'd probably screw it up." eBay also acquired its own version of Google Local Availability through its acquisition of Milo, which shows local product availability.
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About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.
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