Google to Take on Amazon in Retail Space: Report

Google is considering a move to take on Amazon with Internet-based, one-day-shipping retail shopping, according to a report.

Amazon.com Inc. (NASDAQ: AMZN) is the world's largest online retailer, and the company has been taking Web traffic from Google Inc. (NASDAQ: GOOG). Google is in talks with leading retailers and shippers, including Macy's, Gap Inc., and OfficeMax, in an attempt to set up a same-day-delivery, online retail service that directly competes with Amazon, The Wall Street Journal reported.

Mountain View, Calif.-based Google declined comment, as did Seattle-headquartered Amazon, which is pinning its future largely on Amazon Prime memberships. For $79 a year, Prime members get free two-day shipping and other advantages, including content like streaming video services. Roughly 40 percent of Google's revenue comes from retail sources, said Scot Wingo, CEO of ChannelAdvisor, an online commerce platform provider.

But Amazon Prime is reportedly threatening that revenue, and Google wants to hang on, if not build more.

Once a consumer joins Amazon Prime, their searches for products at Google have to decrease precipitously, Wingo said in a blog post.

As a Prime user, I only look for products on Google and other channels if I can't find it on Amazon, Wingo added. Amazon has created a lock-in and they have the world's best product search engine. That's 40 percent of the Internet that Google really can't afford to lose serious share on.

Google's plan is said to not go so far as taking on Amazon with direct selling to customers, as Amazon does. However, the report said Google will work closely with retailers to produce product-search and fast-shipping features that enhance the consumer experience.

Google's new online service would allow the company to determine if a retailer had online stock of a product or products in nearby brick-and-mortar stores or warehouses. Shoppers would then be offered the option of getting their item or items fast, via one- or two-day shipping.

Google will test the new online product in the San Francisco area, and United Parcel Service Inc. might be involved, the Journal reported.