Since last fall, Google has shown a more aggressive stance in challenging Amazon's dominance in e-commerce, particularly as Facebook has also been making its own significant maneuvers in the space.
Google's $125 million acquisition of Channel Intelligence, one of its four Google Shopping launch partners, is designed in part to develop more in-house capabilities to keep pace with the competition. Read the release. Eventually, Channel Intelligence's tools could have even wider applications for Google's related advertising/e-commerce programs, particularly the paid Product Listing Ads, unveiled last fall.
As Google works to tie its search ads and display businesses together, e-commerce is increasingly important as a bridge between those two revenue steams. After barely one quarter since PLAs were merged with Google's "free" shopping-related results, in Q4, Google PLAs comprised up to 15% of total search spend. And this is just the beginning.
At this point, Google is unlikely to quickly introduce Channel Intelligence's technology into its PLA business. But why specifically did Google choose to buy Channel Intelligence?
For one thing, Google wants to make it easier for retailers to get information about their products in front of consumers online. Secondly, in order to enhance its appeal to marketers, retailers have been demanding better measurements to help improve the effectiveness of their advertising and marketing campaigns. Lastly, Channel Intelligence's software is considered an improvement over what Google can already do to make it easier for shoppers to click through and purchase products directly from retailers.
There are still a few issues to be sorted out.
For one thing, it's not clear whether Channel Intelligence's brand will remain independent or if its technology will be folded into Google Shopping, though eventually, that is what's expected to happen. Google had no comment. Since the deal still hasn't closed -- Channel Intelligence's parent, Radnor, PA-based ICG Group anticipates the hand-off to be completed before the end of the quarter -- it's not clear how many of Channel Intelligence's 150-plus staffers will remain on following the integration into Google Shopping.
Lastly, it's not known if Google's relationship to its other Google Shopping launch partners -- they include Mercent, Singlefeed and Channel Advisor -- will change, either through additional acquisitions or another layer of partners, or even scaling back, though sources say the last point is unlikely.