Google ads Amazon-style products to search results – in a big revenue grab

An interesting update by Google which seems directly targeted at Amazon. These new Product Ads from Google will compete with Amazon’s commission model, and may come down to who has the better search.

With billions of dollars in revenue the stakes…

 

In the early days of Google, users would type in a query, we’d return ten blue links, and they’d move on happy. Today people want more. When searching for great local restaurants, people want places to eat right there on the results page, not another click or two away. It’s the same with hotels, flight options, directions and shopping.

Today we’re announcing a new initiative to improve our shopping experience over time–so that shoppers (your customers) can easily research purchases, compare different products, their features and prices, and then connect directly with merchants to make their purchase.

First, we are starting to transition Google Product Search in the U.S. to a purely commercial model built on Product Listing Ads. This new product discovery experience will be called Google Shopping and the transition will be complete this fall.

Ranking in Google Shopping, when the full transition is complete this fall, will be based on a combination of relevance and bid price–just like Product Listing Ads today.

In addition, merchants who want to stand out from the crowd can choose to participate in our new Google Trusted Stores program. Google Trusted Stores is a badge for e-commerce sites which gives users background on merchants—whatever their size—including ratings for on-time shipping and customer service. Google stands behind merchants that have earned the Google Trusted Stores badge with a $1,000 lifetime purchase protection guarantee per shopper.

Second, starting today we’ve also begun to experiment with some new commercial formats on Google.com that will make it easier for users to find and compare different products. These include larger product images that give shoppers a better sense of what is available and also the ability to refine a search by brand or product type.

For example, below is  what stargazers could see on Google.com when searching for [telescopes], or for a specific product, such as [Celestron CPC 800].

 

Continue reading Google ads Amazon-style products to search results – in a big revenue grab

A century of Olympic posters

‘The Start of the Sprinters’ Dash’. Yusaku Kamekura (art director); Osamu Hayasaki (photographer)

 

 

Images from the book “A Century of Olympic Posters” by Margaret Timmers:

As snapshots through time, Olympic posters provide a fascinating record of our world, a lens through which we can explore links between sports and art, politics and place, commerce and culture. A Century of Olympic Posters offers an intensely visual representation of the modern Games, and shows the evolution of the Olympic Games poster as well, from the first official poster for Stockholm in 1912 right up to the present.

 

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Amazon makes a bid to own the most top-level domains

If Amazon.com gets its way — and that’s still a big “if” — it will soon control 76 new domain extensions on the Internet. Most observers had expected the company to apply for .amazon and .kindle, but it seems that was just for starters: Amazon’s ambitions also include a host of generic terms, including the likes of .free, .like, .game, and .shop.

Amazon is looking to nab a slew of compelling names, and if things unfold the way Amazon hopes, the outcome of this power play could reshape the world of Internet commerce — at least as it relates to the behemoth that is Amazon. Here’s the roster of terms Amazon is hoping to grab, excluding some non-Latin names:

  • .movie
  • .video
  • .buy
  • .like
  • .kids
  • .cloud
  • .app
  • .map
  • .show
  • .game
  • .hot
  • .pay
  • .mail

While Amazon aims to clean up in what’s becoming the biggest Internet landgrab ever, the public — individuals or business owners — is fated to play the role of bystander in this cyberdrama. Amazon’s names won’t be open to the public in the way that, say, .com names are, where anyone can register AnythingTheyWant.com. Want to own Chocolate.shop? Forget it. As Amazon says clearly: “All domains in the .SHOP registry will remain the property of Amazon.”

 

See the rest of Amazon’s requested domains and read the full storyAmazon.com’s domain power play: We want to control them all

Continue reading Amazon makes a bid to own the most top-level domains

Amazon is a buy, $AMZN

I’m not an stock analyst but I do like to trade and my specialty is tech. Specifically, trends in the industry and I think Amazon (AMZN) is trending for three reasons: warehouses, cloud, and e-books.

Amazon’s core business model is to dominate the 174 billion dollar e-commerce industry. The growth for which is incredible, a rate of 15% per year with plenty of space for growth; e-commerce is only 4.5% of retail commerce (pdf).

Definitely a good situation to be in, but with so much money to be made the powerhouses, like Walmart, Target, and Best Buy, want in. In response Amazon is making an agressive move with what I call, warehousing.

The official title of this program is Fulfillment by Amazon, which I think is a cagey way of understating their moves. They don’t want to alert the competition. The program involves Amazon building huge warehouses to store and ship goods. At first it was just to sell their own goods but it has since expanded to every seller.

Now anyone can list their products on the site and send them to an Amazon warehouse. The retailer will hold them until they sell then quickly package and ship.

It’s working really well. It makes selling even more easier, which is hard because I think Amazon has the best/easiest model for selling goods on the web. It  just invites more and more to join and continually expands Amazon’s offerings. This increases the fees they get for each sale and corners the market (eating Ebay‘s lunch). It’s working so well that big box retailer, Target, is selling on Amazon, in essence forcing others to partner with Amazon rather than compete.

On a side note, is gives Amazon a small risk. In good times they ship and sell, while working hard to be an efficient warehouse that keep costs down on packaging and shipping. In bad times they could be left with large staffs, full warehouses, and bleeding money. Definitely, something to think about.

That risk requires Amazon to be agressive and keep on selling, which is exactly where they need to be (hungry). Which is exactly what I look for in a company to invest in.

Amazon’s Web Service

Now lets switch to another focus, the cloud. A popular topic these days and everyone is making a play. But all the plays are for cloud applications. Not Amazon, they are building real estate that the applications will run on. The program is called Amazon Web Service (AWS).

Through investments of 100s of millions that have baffled Wall Street they have created incredible economies of scale. Like server capacity for $0.12/hour and storage for $0.12/GB. Offerings so cheap they are irresistible. It’s a play to undercut everyone on the market and it’s working. No one else on the market can compete and if they wanted to it would take years to build.

To which the common stock market analyst quips; there’s not much money in $2.99/ month hosting fees. True enough but if you add up several million of those and combine it with a rapidly growing personal website market it changes the story. Remember, in the future everyone will have their own website and they will be paying someone to host it.

I’m barely touching the surface too. Corporations, all of them, are going to need computing power. They can build it themselves (and many will) but a large majority will outsource it. A billion dollar market and Amazon will dominate that as well.

Take a look at their product listing, it’s impressive:

This is kind of like buying Manhattan Island before the settlers arrive and then renting out each acre. It’s an endless supply of money.

E-Books

I saved e-books for last because the topic so popular that everything tends to get ignored. In a nutshell, Amazon made its bones as an online bookstore but that industry (paper books) is on the decline. You can buy nearly any book for a couple of dollars and that means very low fees for Amazon to profit on.

In response they created the Kindle to spark the e-book industry and got lucky. The Kindle hit at a time when, really, no one else was competing in the e-book market. Add in that, thanks to the iPhone, app stores are the key to building the market. To which Amazon responded perfectly. Their push to get every book they can on the Kindle is legendary and the fights have been fun.

Now millions of books are available on the Kindle and it is bringing in billions for them. Some reports say it is now 10% of their sales and generating $5+ billion in revenue. Great numbers but what is more important is that Amazon took its primary business, reinvented it, created a hugely profitable industry, and is dominating it.

Add up all three of these major moves and I think Amazon is well positioned for the future.

Next I will make my first attempt to gauge the P/E earnings on the stock and determine my own target price for the stock!