“OK Google, give everyone a Google Mini.” It is a small price to pay for world dominance.
The idea is not so far-fetched. Multinational investment bank Morgan Stanley analyst Brian Nowak wrote, “Google-parent Alphabet should spend $3+ billion to put an A$48 Google Mini in every U.S. (argueably global) home. It is a small price to pay to fend off Amazon.”
Now, it is not about asking Alexa or OK Google the time or temperature. It is about the bigger revenue streams that smart speakers can generate. And that it the point of this article.
“The growth of voice shopping combined with Amazon’s expected install base advantage could threaten long-term growth in Alphabet’s high-monetising retail search category. Like the mobile transition when Alphabet gave Android to OEMs and began paying Apple to power Safari search. We believe Alphabet should give away a Google Home Mini to every U.S. (arguably global) household,” said Nowak.
Amazon 101 – it’s huge!
Alexa is not so much a smart speaker as a gateway to Amazon services
- Amazon online store (and that is huge covering not only its products but third-party sellers)
- Woot (‘One Day, One Deal’ not dissimilar to Catch-of-the-Day)
- Shop Bop (trendsetters site)
- Quidsi (Wag.com [pet supplies], Soap.com [household needs], Diapers.com [baby supplies], and BeautyBar.com [cosmetics]
- Zappos (one of the world’s largest online shoe retailers)
- Prime Reading (e-books and Audible audiobooks)
- AbeBooks (tracks down rare, out-of-print books)
- Good Reads (a community of 40+ million ‘book junkies’ and in the top 350 most trafficked websites in the world)
- CreateSpace (content publishing and distribution for filmmakers, music artists and authors to publish their work and distribute it on demand)
- Prime Video (including TV/movie production and content rental and sale)
- Twitch TV (video gaming, including walkthroughs of video games, broadcasts of e-sports competitions and other gaming-related events)
- Double Helix Games (titles such as Killer Instinct and Silent Hill: Homecoming.)
- IMBd (Internet Movie Database provides information on television shows, movies, actors and producers)
- Alexa (a smart speaker business aimed at opening access to all Amazon ventures)
- Kiva Systems (Amazon Robotics and drone delivery technology)
- Whole Food Market (a potential alternative to major food retailers)
- Amazon Fulfilment/Distribution
- And many, many more
Amazon has no peer, at least in the U.S.
In the media segment, Amazon competes with media game-changer Netflix; Time Warner Cable; Apple iTunes; Google Play Store/Music/Youtube Video; and thousands of media producers.
The general merchandise segment includes brick and mortar retailers like Best Buy; Family Dollar; RadioShack; Staples; Target; Walmart, Sears, Big Lots, Delia, and Systemacs.
Its online competition in the electronics and general merchandise segment includes eBay; Alibaba Group; LightInTheBox Holding Co; Overstock.com; PCM; Vipshop Holdings; JD.com; Wayfair and Zulily.
In the cloud Amazon competes with several of the world’s largest companies including Google; Microsoft; Apple; CDW; PC Connection; Insight Enterprises; Oracle; salesforce.com; Accenture, IBM; Citrix Systems and any cloud hosting operation.
In 2017 its turnover was US$161.5 billion, and it had a market capitalisation only second to Apple at $777.8 billion. It employs around 600,000 people. Apple employs 123,000+ and Google is about 90,000+.
World’s top technology companies by market cap
|Company||Market cap (shares x price per share) US Billions|
So back to Google – the only company with the power to counter Amazon
Google has the advertising network under control with 80% plus of the world using Android smartphones and devices. It has the search business pretty well tied up. Microsoft’s Bing comes a very distant second place.
But what some might not know is Amazon’s digital advertising business ranks fifth among U.S. companies, according to eMarketer. A JPMorgan estimate says Amazon’s ad business brought in $2.8 billion in 2017, and that number is expected to balloon to $6.6 billion in 2019. Of course, that still pales in comparison to Google at $40.1 billion and Facebook at $21.6 billion,
What Google risks through inaction is that Amazon’s Alexa may become the default smart speaker (at least in the US) and will pick up a larger share of the advertising pie.