Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Google Readies Its Amazon Prime Killer

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

In an all-out effort to keep shoppers dialed into the Google (NASDAQ: GOOGL  ) ecosystem, the company has reportedly been readying a same-day shipping service aimed at directly competing against Amazon's (NASDAQ: AMZN  ) Prime shipping service. Dubbed "Google Express Checkout," the service is expected to cost $10 to $15 less than the $79 annual fee Amazon charges for its Prime service, but will offer same-day deliveries from the likes of Target, Wal-Mart, Walgreens, and even Safeway. On the surface, the motivation appears that Google wants a bigger piece of the e-commerce pie, but deeper down this is likely part of a larger effort to collect more data about its users.

Unlocking Android
Although Android enjoys a 70.1% worldwide market share, it controls the minority of the industry's profits. The abundance of sub-$250 Android-powered smartphones has attracted a more frugal class of smartphone users compared to Apple iEnthusiasts. As a result, Google has been working on ways to extract more value out of its Android user base, which naturally means improving the effectiveness of its mobile advertising platform. A same-day delivery service would allow Google to collect a combination of online and offline data about user shopping behavior. Over time, this valuable data should allow Google to increase the relevancy of its mobile ads, which ultimately should translate into increased mobile ad spending.

From search giant to e-commerce king?
Google is in a potentially unique position to capitalize on e-commerce growth, since shopping-related searches often start on a search engine. However, Google has to deal the challenge of breaking the association among users that online shopping typically ends away from Google's domain. If successful, Google has a seemingly large pool of users that it can prospect for new data.

At this time, it isn't known if this same-day delivery service will be the first nationwide rollout among major competitors. eBay (NASDAQ: EBAY  ) has been trialing a same-day delivery network in New York and San Francisco, which relies on excess delivery capacity within those cities. eBay CEO John Donahoe has coined it "the Uber of deliver networks," which presents eBay with a massive retail opportunity.

What will Amazon do?
To combat the same-day delivery threat, Amazon plans on growing its warehouse network to reduce its two-day shipping time down to one day for most areas. In larger urban areas, the company believes it will be possible to offer same-day delivery. However, CEO Jeff Bezos has gone on record saying he doesn't see how a nationwide same-day delivery service would be economical. Should Google or eBay show success with their same-day delivery platforms, you better believe Amazon will find a way to make it happen.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.

Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 06, 2013, at 10:48 PM, prginww wrote:

    Amazon prime is already a rip off. Why pay amazon for free shipping that's not really free...they charge for it. Nearly every other vendor offers free shipping so why pay amazon for the privilege. Amazons prices are already expensive. If you search on, you'll see how many vendors offer far better pricing than amazon and they offer free shipping and no sales tax. I search on as well as eBay before I buy anything. eBay now has some very competitive vendors. I have saved thousands of dollars by not shopping on amazon. If ou bought it on amazon, you royally overpaid and you got Bezosed. Intelligent people avoid amazon.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2296250, ~/Articles/ArticleHandler.aspx, 9/30/2016 4:30:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
AMZN $829.05 Up +0.33 +0.04% CAPS Rating: ****
GOOGL $802.64 Down -7.42 -0.92%
Alphabet (A shares… CAPS Rating: *****
AAPL $112.18 Down -1.77 -1.55%
Apple CAPS Rating: ****
EBAY $32.30 Up +0.45 +1.41%
eBay CAPS Rating: ****
SWY.DL $0.00 Down +0.00 +0.00%
Safeway CAPS Rating: **
TGT $67.72 Down -0.10 -0.15%
Target CAPS Rating: ***
WBA $79.21 Down -1.45 -1.80%
Walgreens Boots Al… CAPS Rating: ****