Google Inc. ( GOOG ), the world's
most popular Internet search engine, is moving beyond its search
business. The company is testing a same-day delivery service to
online customers to gain a foothold in the e-commerce world.
The new service Google Shopping Express will provide same-day
delivery of food and other products bought online from
participating retailers. The companies include retail giants such
as Target, Staples, Office Depot Inc, Toys 'R'Us and Walgreens and
smaller outlets such as Blue Bottle Coffee and Palo Alto Toy &
The program will initially be limited to the San Francisco Bay
Area but Google plans to expand the service after the local beta
test. The company stated that the service will be free for now but
will be charged later.
Online shopping has changed the shopping scenario. Customers
visit retail shops to physically check the products but they
finally purchase it online to get attractive discounts. Thus, it is
important for Google to adopt innovative measures and offer the
best to its online customers to compete with the likes of
Amazon ( AMZN ) and
eBay ( EBAY ) in the
The need for continuous e-commerce initiatives is rising due to
the growing demand for online shopping and the ever-increasing
needs of Internet users. Prompt and accurate delivery of products
is very important for the success of any company in the e-commerce
Forrester forecasts that online shoppers in the United States
will spend $327 billion in 2016, up 45% from $226 billion in 2012.
Further, eMarketer estimates that e-commerce sales are expected to
increase 14.2% over 2012levelsto $256 billion in 2013.
The Google Shopping Express initiative is indicative of the
company's expansion into e-commerce from online search. The
diversification of its business into a fast-growing segment is a
positive, especially since growth in the increasingly competitive
search market could turn slower than in the past.
In the fourth quarter of fiscal 2012, Google's gross revenue
(including TAC) touched a record $14.4 billion, representing
sequential and year-over-year increases of 2.3% and 36.2%,
respectively. Excluding the $1.5 billion contribution from
Motorola, revenues were up 21.9% from the year-ago quarter.
Google has a Zacks Rank #3 (Hold). Intersil
Corp. ( ISIL ), which carries
a Zacks Rank #2 (Buy), is also performing well and is therefore
worth considering.AMAZON.COM INC (AMZN): Free Stock Analysis
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