The year of 2012 is winding down and 2013 will be taking its place. This is the time of year the people tend to reminisce about everything that happened during the year and try to predict what will go down in the next. Next year, we are likely to see a major turf war escalate between Google and Amazon. The battlegrounds will be online ads, retail, tablets and cloud services.
The internet is starting to feel a little small for online giants Google and Amazon, who up until now have kept up the uneasy appearance of cooperation. Google's goal is to be people's first and only choice for the best search engine to find anything they can think of. Amazon wants to be the one online retailer a customer can go to be able to buy everything and anything. The two goals have been able to coexist more or less peacefully until now. After all, a Google search of any buyable item will rank Amazon on the first page. But one project Google started a decade ago has Amazon CEO Jeff Bezos, who was also an early Google investor, uneasy with the current way their territories are overlapping.
Ten years ago, Google began scanning and digitizing catalogs and books to sell electronic editions which quickly caused Amazon to follow. It launched its Kindle e-reader a few years later. Amazon further threatened Google's revenue when it started expanding its ad business. Google's ads are backed up by more data and resources and, for many people, the internet and Google is the same thing. However, the data Amazon collects is more immediately useful to the customer. The online retailer had further developed its "DSP" technology, which draws from the enormous backlog of purchased history to display a specific ad on Amazon and other websites. (Don't I know it. Amazon, please stop taunting me on every website I go on with that awesome leather jacket that you happen to be selling.) Amazon knows what you have searched for, have already bought and what you are now in the process of buying.
A potential partnership with Xaxis, a media advertising company, would help Amazon use the "DSP" technology to sell targeted advertisements for products it may not actually be selling on its website. The technique has led Amazon to triple their ad impressions over last year. As many as 30 percent of online shoppers have begun their product search on Amazon.com, compared to only 13 percent that started searching with Google. That is a big switch from just two years ago, when search engines were the starting points.
Google responded to this challenge with Google Shopping, an updated product search service that charged retailers and online sellers a fee to be listed in their search results. This gave Amazon yet another reason to be concerned with its dependency on the search engine for traffic.
Amazon's 2011 launch of their Kindle Fire tablets that used the Android operating system could have been a fresh start for the two. Instead, Amazon created their own App store that completely replaced the Google Play store in their stripped down version of the Android OS.
Google had perhaps secured a way to compete with Amazon's superb delivery service when it acquired Bufferbox, a company that provides shoppers a safe and secure locker to have their packages shipped to or from. They are currently offering San Francisco same-day delivery. Amazon also has some of the best customer service online, something that is hard for Google to match since they have no inventory to sell. To solve that slight technicality, Google launched a merchant certification service that will ship products quickly and backs them with up to $1,000 in "purchase protection. Google is not revealing any official plans for a full retail store, online or brick, but if it can win the delivery battle and remain the top search giant, Amazon would have a lot to be worried about.