{"id":71008,"date":"2015-04-14T04:13:09","date_gmt":"2015-04-14T08:13:09","guid":{"rendered":"http:\/\/countingpips.com\/?p=71008"},"modified":"2015-04-14T07:58:35","modified_gmt":"2015-04-14T11:58:35","slug":"did-google-just-declare-war-on-amazon-again","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/04\/did-google-just-declare-war-on-amazon-again\/","title":{"rendered":"Did Google Just Declare War on Amazon (Again)?"},"content":{"rendered":"
April 14, 2015<\/div>
\r\n<\/div><\/div>

By WallStreetDaily.com<\/span><\/a> \"Google<\/p>\n

By Louis Basenese<\/a>, Chief Technology Analyst <\/em><\/p>\n

Pull up a chair, and get the popcorn out\u2026 We have yet another fierce scrap between two of the world\u2019s biggest tech giants.<\/p>\n

In the race to develop new technologies and innovations \u2013 and break into untapped, highly lucrative markets \u2013 \u00a0such scuffles are common.<\/p>\n

In August 2014, for example, Google<\/strong> (GOOGL<\/a>) went public with \u201cProject Wing\u201d \u2013 a previously secretive project to develop a drone-delivery service.<\/p>\n

The revelation was a shot across the bow of fellow tech juggernaut, Amazon<\/strong> (AMZN<\/a>). Eight months earlier, CEO Jeff Bezos had appeared on 60 Minutes<\/em> to announce Amazon\u2019s own drone-delivery ambitions<\/a> \u2013 Prime Air<\/a>.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Well, if the latest rumors are true, the search giant is stirring up trouble again. This time, in a high-dollar market, worth up to $400 billion per year\u2026<\/p>\n

A Whole New Spin on \u201cGoogle It\u201d<\/h2>\n

Now, you\u2019d think that Google\u2019s latest venture would be another cool, high-tech offering like drones.<\/p>\n

But instead, it\u2019s rather low-tech\u2026 involving plumbers, electricians, and roofers.<\/p>\n

There are increasing rumors that Google is preparing to expand its specialized search capabilities in order to connect consumers with local home service providers.<\/p>\n

Currently, searches for things like plumbers only return links to local contractors\u2019 websites or contact information. Then, consumers must navigate strategically placed advertisements, as well.<\/p>\n

But Google\u2019s new service will reportedly connect search users directly with contractors.<\/p>\n

In other words, while a regular search just spits out a list of options and a few ads, Google will now act as a middleman and actually allow you to set up and schedule the service. In return, it\u2019ll take a cut of the fee.<\/p>\n

Again, this is all speculation. But keep in mind that in 2014, Google led a $100-million investment in home service company, Thumbtack. So it\u2019s obviously interested in the home services market.<\/p>\n

Sources say an official announcement is likely to come at Google\u2019s annual advertiser summit in May.<\/p>\n

Coincidence? Hardly\u2026<\/p>\n

Not even two weeks ago, Amazon launched a similar service, which allows customers to schedule home services after making purchases.<\/p>\n

Dubbed Amazon Home Services, it was beta-tested in major cities \u2013 including Seattle, Los Angeles, and New York \u2013 as Amazon Local Services. Now it\u2019s available in 41 states and 30 of the biggest metropolitan areas in the United States, according to Peter Faricy, Vice President for Amazon Marketplace.<\/p>\n

Say, for example, you order a new sink. Amazon will hook you up with a plumber to install it. Or if you buy a new, 60\u201d Samsung<\/strong>\u00a0(SSNLF<\/a>) LED TV, Amazon has a guy who can come mount it on the wall for you.<\/p>\n

Amazon benefits by taking a cut (anywhere from 5% to 19%) of the service providers\u2019 fee.<\/p>\n

So why in the world are two of the biggest technology companies interested in such a low-tech, local opportunity?<\/p>\n

It\u2019s All About the Money\u2026 or Is It?<\/h2>\n

Although the home service market might consist of a lot of small ticket items \u2013 $150 to install a ceiling fan\u2026 $600 to clean out a chimney\u2026 they add up.<\/p>\n

\u201cIt\u2019s a huge market,\u201d says Gartner analyst, Jason Daigler.<\/p>\n

Indeed. Estimates peg the overall addressable market size at $250 billion to $400 billion.<\/p>\n

To put that into perspective, the high end of the estimates is bigger than Google\u2019s or Amazon\u2019s current market cap!<\/p>\n

So expanding into home services and capturing a meaningful market share could contribute substantial profits to the bottom line.<\/p>\n

At the same time, home services represent a low-risk expansion opportunity for both companies.<\/p>\n

As consumers, we clearly don\u2019t like to go it alone when it comes to finding service providers.<\/p>\n

Consider that the likes of Angie\u2019s List<\/strong> (ANGI<\/a>), Yelp<\/strong> (YELP<\/a>), Groupon<\/strong> (GRPN<\/a>), and Craigslist already connect us directly to service providers. So they\u2019ve validated that demand exists.<\/p>\n

Obviously, Amazon and Google believe they can do a better job of helping us. I tend to agree, given each company\u2019s platforms, extensive reach, and the invaluable intelligence gleaned from a near-endless supply of data on consumer habits.<\/p>\n

But it\u2019s not going to come without challenges\u2026<\/p>\n

Wanted: A Critical Mass of Contractors<\/h2>\n

The home services market is extremely fragmented and localized. Think about it: Very few, if any, national chains exist for plumbers, electricians, roofers, etc.<\/p>\n

It also lacks uniformity. Some handymen have nothing more than a truck and a sign. Meanwhile, some service companies boast fleets of trucks and technicians.<\/p>\n

Local\u2026 fragmented\u2026 heterogeneous. Add it all up, and it requires a highly customized approach to succeed. And that inevitably cuts into margins.<\/p>\n

Even more so when we throw in additional layers of complexity and due diligence, such as performing background checks (for example, Amazon has a full-time vetting team in Seattle) and providing a platform for reviews and consumer protections for bad service.<\/p>\n

But, as I told CNBC\u2019s Morgan Brennan in a recent interview<\/a>, \u201cIf anyone can automate a seemingly daunting market via data, it\u2019s Google.\u201d<\/p>\n

Above all, Google and Amazon need to get a critical mass of service providers on the system in order to make it a true benefit for consumers and <\/em>a boon for shareholders.<\/p>\n

But the tech behemoths\u2019 move into home services isn\u2019t simply another opportunity to make money, though\u2026<\/p>\n

Show Me the Money<\/h2>\n

The desire to \u201cgo local\u201d serves a much higher purpose \u2013 expanding each company\u2019s reach and entrenching their services into our everyday lives as much as possible.<\/p>\n

And Rolling Stone<\/em> thought Goldman Sachs<\/strong> (GS<\/a>) was the vampire squid, \u201crelentlessly jamming its blood funnel into anything that smells like money!\u201d<\/p>\n

Bottom line: By offering more services, Google and Amazon can keep us \u2013 and our hard-earned capital \u2013 from straying elsewhere on the web.<\/p>\n

In the process, we\u2019ll give both companies even better data to keep serving us even more services.<\/p>\n

Talk about a domino effect.<\/p>\n

And with an entire world of consumers to go after, it\u2019s no wonder the two companies are squaring off again in what promises to be another fierce battle.<\/p>\n

Ahead of the tape,<\/p>\n

Louis Basenese<\/p>\n

The post Did Google Just Declare War on Amazon (Again)?<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com By Louis Basenese, Chief Technology Analyst Pull up a chair, and get the popcorn out\u2026 We have yet another fierce scrap between two of the world\u2019s biggest tech giants. In the race to develop new technologies and innovations \u2013 and break into untapped, highly lucrative markets \u2013 \u00a0such scuffles are common. In August […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-71008","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/71008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=71008"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/71008\/revisions"}],"predecessor-version":[{"id":71027,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/71008\/revisions\/71027"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=71008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=71008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=71008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}