People are performing more and more web searches using voice assistants these days. Google says the number of voice searches on mobile devices tripled over the previous two years. What's more, smart speakers like Amazon.com's (NASDAQ:AMZN) Echo have ushered in a new hardware platform specifically catered toward voice searches.
That presents a problem for the Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) subsidiary. While the shift to mobile represented a significant hurdle for Google to overcome, it still had the same mechanical interaction as search on desktops. Voice searches do away with screen real estate, relying solely on audio.
Interestingly, Google's best ideas to monetize voice searches may be better executed by Amazon. What's more, Amazon already has a lead over Google in the smart speaker hardware category, and as a company Google already considers its biggest rival, it could become an even bigger threat as voice search grows.
Google's best ideas (so far) to monetize voice search
When Google CEO Sundar Pichai was asked about monetizing voice searches during Alphabet's third-quarter earnings call, he didn't give a straightforward answer. Instead, he talked about how voice search is an incremental opportunity for Google; voice search isn't replacing text search.
"We view this as providing us more access across many different surfaces, many different contexts, being there for them when they need it," Pichai said. "So, in that view, I think it will all be a positive for us going forward." Still, his answer left questions about how Google might take advantage of the opportunity.
At a Credit Suisse conference at the end of November, Google's ad chief Sridhar Ramaswamy was asked how it would monetize voice search. Ramaswamy threw out a few ideas. "I think it can range from being purely transactional, meaning we make it convenient for you to fulfill a transaction with this assistance, or it can involve promotion."
While Google might be the world's leading digital advertiser, Amazon has the upper hand when it comes to carrying out transactions. Additionally, Amazon's relatively small ad business could play a much larger role as it gets its hardware into more homes and hands.
Your own personal shopper
If carrying out transactions is one of the best ways to monetize voice search, nobody is better equipped to handle that than Amazon. Not only is Amazon the largest online retailer, but that status means that it has tons of customers' payment and shipping information on file.
Amazon's voice assistant, Alexa, already works with Amazon's marketplace, and select third party apps are able to carry out transactions as well. For example, you can ask Alexa to order pizza or send a car for you. Amazon could easily open its payments platform to developers to support more types of transactions and make some money off of it. Currently, Amazon only monetizes Alexa (its voice assistant) through hardware sales.
Fifty-five percent of online shoppers already start their product search on Amazon.com, and if consumers are going to be carrying out transactions through a voice assistant, they likely put more trust in Amazon than Google to find the best product.
Pichai may be right that voice search will "expand the pie," on the basis that if you provide more ways to conduct web searches, consumers are likely to perform more of them. But the risk comes from more of the valuable transactional product searches moving to voice search, where Amazon holds a significant advantage.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy owns shares of Amazon.com. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.