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Amazon Is Hitting Google Where It Hurts

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Forget the tablet wars. Google is losing a very valuable search segment to Amazon.

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The reworking of Google Shopping won't be completed until later this autumn, so it's too early to declare that it just can't compete with Amazon for shoppers' eyeballs.

But one other big segment of the retailing ecosystem already has reason to panic, and that is, all retailers that aren't on Amazon. They have depended on Google for exposure to customers. But even the biggest and healthiest retailers may balk at paying for all of their goods to be included in Google Shopping. Smaller retailers may have to give up on Google.

A Google executive told the New York Times that the company would offer retailers a choice in payment plans, including pay-per-click and payments based on actual purchases. The charges don't start taking effect until sometime in October.

Retailers may have to choose one of the above, or risk online oblivion. A blog post by Forrester Research analyst Sarah Rotman Epps concludes that Amazon's introduction of a new line of Kindles this month will help it along its path to "an increasing share of consumers' wallets."
No positions in stocks mentioned.
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