
While Google fights on the edges, Amazon is attacking their core - yan
http://cdixon.org/2010/05/22/while-google-fights-on-the-edges-amazon-is-attacking-their-core/
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mark_l_watson
The author makes a really good point. Personally, about 90% of the time I buy
something online I just go straight to Amazon.

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breck
Me too, ever since I got Amazon Prime (do you have that as well?)

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ben1040
Amazon Prime has shifted my buying habits to where I go there first for even
small things like personal care items I would have otherwise bought at, say,
Target.

I used to travel 4 days every week and so my weekends at home became extremely
precious time. By buying that stuff on Amazon on Wednesdays from my hotel
room, the free two day shipping meant it'd be delivered when I was working
from home on Fridays. I was able to do the things I wanted to do on the
weekend rather than spending time at the store doing what I needed to do.

I don't have that horrible travel schedule anymore but I still appreciate how
I can just order shampoo from my mobile phone when I realize I'm running low.

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ekanes
"[Google] competes with Amazon in a number of areas, particularly web services
and big data."

I believe Amazon treats web services and big data seriously, but IIRC they're
well under 1% of revenues. These services are of particular interest to the HN
crowd of course, but just wanted to point out that it's far from a core
offering for them.

Amazon has become the incumbent in this space, which may have some value in
the future, but it's entirely possible they're happily losing money on it at
the moment.

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barrkel
They might be 1% of revenues, but more interesting to my mind is what % of
profits they are. One of the core motivations, as I understand it, was to
utilize the excess capacity Amazon had built for peak seasonal activity. These
sunk costs don't necessarily count against the EC2, S3 etc. revenue.

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ShabbyDoo
Amazon's "attack" relies upon its continued physical goods dominance. Perhaps
Google should find ways to help out Amazon's competitors.

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jonmc12
This is a very interesting observation with respect to what Facebook is doing
with their 'real-world things' Open Graph (<http://goo.gl/xn4c>) strategy and
their plans for an internal currency. I say this will be at least a 3-way
race:

1\. Amazon attracts users with inventory, content. They will win share through
selection, ease of purchase and branding. 2\. Facebook attracts users through
social interaction, peer-peer trust. They will win share by facilitating
transactions within their community. 3\. Google attracts users by helping find
what they want to buy. They will win share by meaningfully indexing content
and putting ads in the right place.

Its an over-simplification, but you go to Amazon when you know what you want;
you go to Google to figure out what you want; and you go to facebook to buy
something from within your network (when trust matters). When none of this
matters, its all about the brand.

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kylemathews
Saying Facebook has a hand in the ecommerce market is still very speculative
at the moment. That may happen but right now it doesn't even look like they're
moving that direction really.

And also, Amazon attracts me definitely for their vast inventory but primarily
because of their reviews which falls under the social interaction / peer-peer
trust you ascribe to Facebook.

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ekanes
True, and Facebook can't truly leverage any of its "friend-based" data without
ugly privacy skirmishes. Because Amazon didn't start out claiming that your
opinions (eg. reviews) were private, they have no trust issue to overcome.
Trust is the elephant in the room for Facebook.

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Legion
>> and Facebook can't truly leverage any of its "friend-based" data without
ugly privacy skirmishes.

Oh if only that were the roadblock that it ought to be.

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sketerpot
I just wanted to point out, that is a really misleading graph. All the lines
start at "100%", so the scales aren't comparable at all.

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shmichael
Actually, this makes perfect sense. The sales data at any given point of time
is given as a percentage of the baseline, which is set at Q1 '03.

~~~
sketerpot
Of course, it makes sense if you interpret it right -- but it looks at first
glance like it's comparing absolute sales figures, rather than change from
baseline for each.

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mattmaroon
I don't think this is a fair comparison. While Google does make most of their
money from ads that result in a purchase, that purchase is not always the sort
of thing Amazon sells.

For instance one of the highest grossing per-click terms has consistently been
mesothelioma. I'm guessing Amazon won't be selling legal services this year.

My suspicion is that much more of Google's revenue comes from purchased
services (and I'm counting their #1 spender, eBay, as a service), digital or
otherwise, than tangible, shippable, durable goods.

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metamemetics
Google's core business is AdSense. This article doesn't take into account
services. While amazon can take up an increasingly larger chunk of the
internet retailer pie, presumably not all of Ads on AdSense are for goods. As
long as people still use search engines to find services in addition to goods
businesses will stay pay for ads and AdSense can keep growing. Amazon isn't
really entering the ad business or killing off the need for advertising.

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boundlessdreamz
you are mistaking adsense with adwords. Currently adwords revenue dwarf
adsense

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Hoff
Amazon's sales portal and Apple's iAd adverts are aimed at Google's money.
Amazon has its web hosting and storage services. What Apple is planning for
their Maiden, North Carolina DC isn't yet clear.

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yanw
If anyone is going after anyone's core here it's Google going after Amazon's
with the to be launched 'editions' service, also they don't have the legacy
tax and inertia as they don't sell physical product. As long as people are
searching Google the'll find a way to make money, direct intent is but a
fraction of search ads.

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tybris
Agreed, but the reality is that Amazon has over a decade of experience in
dealing with publishers. Neither Google nor Apple is going to catch up with
that. Google just realizes they have a risky high-margin business and they
need to diversify. They're doing so on both novel and established areas.

Outside the obvious A9 disaster, Amazon doesn't usually chase the competition.
They have a low margin business, meaning they don't have a fierce bite, but do
have a long breath. They start early to become the leader and then try to
maintain their position. Apparently quite successfully.

