Could Google’s Search Dominance Be Under Threat From Amazon?
One of Amazon's next big moves will be to take the gloves off with Google.
Amazon will become a proper search engine in the mold of other worldwide Internet giants.
Why do I say this?
Ultimately what is holding the company back from even more ad revenue is its own retail business. The reason is real estate. The ad business continues to demand more and more surface area, and at some point, the needs of the retail business and the needs of a scaled search/advertising business will be too difficult to reconcile.
It is almost scary to look at Amazon now as almost everything on the page is sold, and every part of product detail pages as well. Ad units are everywhere. At some point, a major switch will need to happen. At some point, I think consumers will demand it too.
What will it mean?
The biggest thing is true organic listings. In the past year, Amazon has already started directing people off the site and allowing people to buy off-site advertising, as long as you are using Amazon's ad engine. You can take advantage of this using Amazon’s Demand-Side Platform (or DSP). However, this is only display-based advertising —most brands are only seeing DSP account for 5-20% of their revenue . Which leads me to my next point.
Amazon needs more surface area for ads in search results. At some point growing the ad business means growing more inventory. Inventory means more keywords that surface more results (particularly top of funnel and mid-funnel I think Amazon still has a lot of opportunity Google gets today). Keyword-based ads are more powerful for Amazon for a few reason
Google has a lot to lose here, and its margin is Amazon's opportunity. You might even call this low-hanging fruit. Amazon leadership would call this a “two-way door”. If it didn’t like the results of an experiment, it could always switch back. The reality is there are very few one-way doors on the Internet because pages are so fungible.
Amazon’s biggest issue implementing this idea will be how to repurpose its search results page for people who aren’t buying immediately — right now the entire experience is geared towards buying immediately and improving conversion. Sometimes, buyers are just looking for information.
I do not predict Amazon will introduce a new domain name and try to drive traffic there. Too difficult.
