Of all the challenges facing Google, one seems particularly urgent and annoying.
OMG sure Google is going through a lot of complaints these days. From internal turmoil to external hatred, the beginning of 2020 is anything but event-free for the company behind our favorite mobile operating system.
But no matter how important the major obstacles may be, there is another threat that Google is overcoming, which is a serious challenge to its core business and the core principles that allow it to thrive.
I won’t delay it: the threat is Amazon. While other companies have traditionally been portrayed as Google’s main competition: Microsoft on productivity, Apple or maybe even Samsung on mobile, and Facebook or any number of social media posts, news and mobile apps. Online time in general. Perspective: Amazon, above any other entity, has the power and purpose to drive a spear right into the heart of Google. And as 2020 begins, this possibility seems more urgent than ever.
Sounds like a too dramatic proclamation? May be. But when you really start thinking about some of the areas where the shadow of Amazon appears on the horizon of Google, it’s hard to deny that there is something, something that will surely become even more significant as the months go by.
Think about it with me and you’ll see what I mean.
Smart assistants, fight!
First, we talked endlessly about how we entered a post-OS era, where the operating system you use has less of an impact on a business than the digital assistant you trust. And no wonder: once you access a particular assistant ecosystem (Google Assistant, Alexa Amazon, or whatever), you tend to rely on that service for an increasing amount of information search.
For Amazon, that means it’s always one step away from ordering – the company’s most important currency. For Google, it’s more about data and keeping you connected to Google services, because the more Google knows about you, the more ads you can serve both on and off. web.
And boy, the battle between the two approaches is furious. Amazon is working frantically to get Alexa into every part of your life, with what appears to be a spaghetti-up-the-wall strategy of throwing away everything imaginable: speakers, watches, headphones, glasses, rings , even microwave, to watch. what sticks.
As for smart speakers, specifically, the company’s philosophy (and perhaps also its leader in beating Google in the market by a significant margin of time) seems to bear fruit: in the third quarter of last year, Amazon sent nearly three times as many voice-activated speakers as Google, 10.4 million compared to Google’s 3.5 million, according to market analysis firm Canalys.
The disparity on the smart display side of the picture is even more dramatic: according to Canalys, once again, Google sold 700,000 assistant displays in the same period, while Amazon moved 2.2 million units. Oh.
And we’re not just talking about speakers and displays: either with Nest and the Amazon Ring and Google Wi-Fi, or with Amazon Eero, now owned, companies seem to be in tune with almost every area related to the participants they search for. Heck, even with phones, Amazon could have failed fantastically in its attempt to create its own independent ecosystem in 2014, but it quietly attracts Alexa customers through its Prime Exclusive Phones program, which sells phones like Sony, LG and Motorola. with significant discounts for members of the Prime initiative of $ 119 per year.
Amazon came up with a way to position its virtual assistant as the main part of Android, even without having its own device in the picture.
Capture? The phones come with a bunch of pre-installed Amazon apps, including, yes, Alexa. And, although some applications can be removed, usually Alexa can’t. In fact, many of the phones in the Prime Exclusive line come with even Alexa configured to handle hands-free orders right out of the box.
Amazon has effectively devised a way to position its virtual assistant as the main part of the Android phone experience, in other words, even without having its own self-made device in the picture. It’s a feat to accomplish and does a lot to emphasize Alexa as the interface you use to find what you need.
And all this still leads to the two underlying areas where they all make the most immediate and alarming difference.
Enter the advertising arena
Okay, this is where things start to get serious. At the end of the day, regardless of all the hardware and assistant discussions and anything else, Google is an advertising company. That’s where most of the company’s cash is generated, so it’s the heartbeat that keeps Google’s machine running.
For a long time, with all due respect to Jeeves and the rest of the world’s fans, Google’s position as the world’s guardian of information seemed unattainable. But guess what? Amazon is slowly slowing down this barrier and, at least to some extent, threatening to make Google much less relevant than it is today.
Consider: An eMarketer forecast suggests that Amazon will be the only company to increase its revenue from search-based advertising in the US over the next two years. Amazon, the organization believes, will grow to account for nearly 16% of the money earned from search-related advertising in the United States, up from about 13% in 2019, while Google will drop from 73% in 2019 to 70, 5.% In 2021.
It is believed that Amazon’s advertising business has already grown somewhere in the resort by 50% from the end of 2018 to the end of 2019, according to AdWeek, and advertising prices on Amazon have increased by 200% compared to. In the last two years. years, while advertising prices on Google remained relatively constant.
And if the numbers aren’t enough, a report last year in The New York Times really underscores how serious Amazon’s advertising ambitions are. The company, the Times explained, has a lot of data about the products we all buy and this is just the beginning:
In addition to knowing what people are buying, Amazon also knows where people live, because it provides delivery addresses and what credit cards they use. You know how old your children are from baby records and who has a cold, right now, from cough syrup ordered for a two-hour delivery. And the company has expanded a self-service option for advertisers and brands to capitalize on their buyer data.
All of this means that Amazon can run ads on incredibly specific subsets of people – categories that include, according to the Times, people who have bought acne treatments in the last month, people living in households with children between the ages of four and six, and people who recently played fitness videos and exercises on Amazon. And if you think that Amazon ads appear in an environment where the same people are actively looking to buy makeup, you can see why this might be worrying for a company like Google (and it could be why it was difficult for Google over time to cultivate its own Amazon alternative, an effort that seems easier said than done).
And then there is the biggest and most existential threat of all.
Google or Alexa?
For years, Google has been virtually synonymous with search. (Seriously. Go to Bing). But with all the Amazon intrusions mentioned above, there is a very real risk now that Alexa, not Google, could become the de facto search system of the future.
It seems pretty obvious that Amazon’s goal is for this to happen – to get used to thinking about Alexa every time you have a question or order, no matter where you are or what you’re doing. This would serve Amazon’s interests in all the areas we have just discussed, and it would also make Google irrelevant in the areas most important to its continued success.
Amazon focuses on the non-traditional search for the future and trains countless people to turn to it before Google.
I mean, think about it: if Alexa is available wherever you go and you learn to trust it for answers to everything, what role does Google play? Sure, you might still use apps like Gmail and Google Docs, but these types of services don’t help Google understand who you are and what your interests are, the kind of understanding that allows effective advertising. Take a look at your own Google advertising profile. If you click on the qualities that Google knows about you (or you think it knows about you, anyway), you’ll probably see that the vast majority of the information comes from a form of search.
Amazon may not have built its own traditional search engine, but it has effectively found a way to circumvent the need by focusing on the non-traditional search for the future, voice interaction, and empowering countless people to use it. . . And at the end of the day, if you don’t do Google one way or another, it doesn’t exist for Google in a measurable way.
Now, everything in perspective: Google is far from a cooked goose. In most cases, the business thrives or at least does pretty well.
But we all know that trends matter, and if I were Google, my God, this is a trend that I would follow and work to correct as if my life depended on it.