Google Inc., always coy about future plans, is showing stronger signs of interest in online retail.
Google is attempting a significant push into the European retail industry with plans to launch a service aimed at giving traditional bricks-and-mortar retailers a base from which to market and sell their goods online.
Much of the company’s interest in e-commerce appears to revolve around Google Base, a place for people to list nearly any type of digital content or any item for sale, making them searchable by Google.
Google is reportedly launching the retail service in Europe because retailers in the region have expressed dissatisfaction with their online operations. Google Base could be a valuable resource especially for small retailers that have not set up their own online operations.
Google Base, still in beta form, is an online database on which users can submit a variety of information such as sale items, want ads and recipes. Google plans to further develop Google Base to give retailers a venue to offer their products to Google users. In an interview with the Financial Times, Nikesh Aroroa, head of Google’s European operations, said that other sectors such as real estate could also be included in the expanded Google Base.
While many experts see the service as a database for classified ads, competing against sites such as Craigslist, there are also signs that Google Base is evolving into an online retail platform.
Google Base is going to have a huge impact on retailers, Arora told the “Financial Times.”
Asked about its plans for online retail, Google declined to discuss the issue directly, saying that Google Base was not "a retail specific product," but could be used for uploading "a wide range of additional information, commercial and non-commercial, onto the Internet."
Google is currently running a limited e-commerce test of the service, which debuted last October and is still in beta, with a small number of sellers. The participants were recently allowed to start accepting credit-card payments through Google, which has a how-to page available only to its sellers.
Google is apparently planning a big push in Europe, where online sales is experiencing double-digit growth rates.
There are many ways in which retailers can use the Internet to meet their customers’ increasing demands for information, including search advertising and uploading additional data onto Google Base, so it can be found more easily when users are searching on the web, a spokesperson said in an email.
Google would index and package the information into a consumer-friendly search engine, giving its users a virtual supermarket across a number of retail brands.
But it is unclear how companies will respond, given that many of the world’s biggest retailers – including Wal-Mart, the world’s leading retailer, Home Depot, the US home improvement company and Tesco, the UK supermarkets group – have invested millions in online operations.
Some retailers are yet to set up their own internet operations, even though consumer purchases online have soared.
One big UK retailer with no online presence said that Google’s retail offer would be of interest if the internet company could also arrange for distribution. This potentially huge task has raised doubts about the long-term business models of other online retailers such as Amazon.com.
Nevertheless, Google and online retailer Amazon.com, based in Seattle, appear headed on a collision course. As part of its interest in online retail, Google this month unveiled for book publishers the option of making books available only online. Amazon.com last year started offering books and portions of books for online reading.
In approaching Google’s territory, Amazon.com last month was reportedly looking for beta testers for a possible contextual advertising network that would place third-party links to products on the online retailer’s partner websites.
The program is believed to be similar to Google’s AdSense, which is a network of websites that display links to Google advertisers. The links are for products and services related to the website’s content. Google shares revenue from the advertisers with site operators.
Though ambitious, Google’s plan to create a broader e-commerce platform for retailers lags similar initiatives from Amazon and Ebay. “UK clothing and foods group Marks and Spencer, US discounter Target and US bookseller Borders have contracted out online operations to Amazon.”
Until now, Google had been vague about its ambitions for Google Base, which is structured as a collection of databases. Besides being used as a platform for retailers, industry observers who had seen the “beta” version of the product thought the service would be aimed at consumers and allow individuals to swap classified ads for free.
The move represents yet another in a number of expansions beyond the traditional online search realm for Google. In the past week, the company has purchased an online word processor (Writely) and a 3D design software (Sketch Up). Though the company has so far excelled at most of its endeavors, some observers wonder if the company might spread itself too thin.
Google is under pressure to develop new business lines amid fears that growth in its online advertising revenue is slowing after a strong recent run.
In this planned retail venture, for instance, it remains to be seen how the company will compete with established e-commerce companies such as Amazon and E-bay.