Plans for Online Retailing
After tasking success in almost every area they entered, Google is said to be in discussions with some of the leading retailers and shippers such as Gap Inc. (GPS), Macy's (M) and OfficeMax for setting up the service.
The report indicated that Amazon.com's Prime service is a hit in the U.S. during the last few years and threatens the web traffic of Google. The prime services present the shoppers with free two-day shopping for $79 for a year in the U.S. Google is getting about 40% of revenues from retail sources and it is obvious for the company to ensure that they don't lose this major share.
Quoting persons familiar in the matter of discussions, the report indicated that the company is considering plans that come close to preparing direct selling to consumers. The company is also having option to work with retailers' web portals clubbing its existing product-search facilities, which will direct online shoppers to those sites. These will be supported by a new shipping service to create and oversee the shipment.
Google is also having a proposal to test run the project in the San Francisco Bay area for this new venture involving logistics company United Parcel Services (UPS).
When it comes to searching of products on the web, undoubtedly Google dominates the scene. Therefore, their next logical steps would be to purchase and getting items delivered at the consumers place. For the shipping, the company needs to rely on third-party and how things would shape up remains to be seen.
Amazon is having massive warehouses chain with its own inventory and has good control over the order processing and goods delivery system.
Google is sitting with cash and cash equivalents of approximately $10.6 billion at the end of its t! hird qua rter results.
Google History
Google's growth over the years needs no mention. The initial product was only a search engine and slowly and steadily the company started offering various services to take on even the biggies in the field, including Microsoft. Their Google Chrome is directly targeting Microsoft's Internet Explorer besides operating system finding its way in specialized laptops named Chromebooks. The company also leads the Android mobile operating system development.
Over the years, the search engine leader acquired YouTube for $1.65 billion, DoubleClick for $3.1 billion, Grand Central for $50 million, On2Technologies for $106.5 million and Aardvark for $50 million. The transaction value clearly indicates that the company is not averse to buy a small or big company as long as it extends its leads in its core business.
The company began its journey in 1996 as a research project by Larry Page and Sergey Brin during their PhD studies in Stanford University in California. Both of them engaged in theorizing for a better system that analyzed the relationships between websites. Andy Bechtolscheim was the first person to fund the project in 1998 with a contribution of $100 thousand. On finding that it the project was taking longer time than expected, the duo offered to sell it to Excite CEO George Bell for $1 million, which was rejected. In 1999, major investors Kleiner Perkins Caufield & Byers and Sequoia Capital announced a $25 million funding.
It took five years for Google to come out with an IPO of 19.6 million share for $85 a share. From then on, Google is one of the favorites of any investors.
iStock Punch
Given the kind of funds that Google has under its kitty and it will not be a tough proposition for the company to enter into strategic alliances with both retailers as well as logistics company for smooth run of the project.
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