) recently announced that it has acquired an online marketing
service Channel Intelligence (CI), a consolidated company owned
ICG Group Inc.
) in a $125 million all cash deal. The transaction is expected to
be completed in the first quarter of 2013, subject to customary
Orlando-based Channel Intelligence offers a number of
data-driven services that help brands and retailers to boost
e-commerce sales. The company's offerings integrate with other
platforms such as
) and its widgets feature alongside products giving options such
as Where to Buy and where to look for specific
CI is already one of the original launch partners for Google
Shopping, developing a technology that can help maximize sales
and Return On Ad Spend (ROAS) with Product Listing Ads (PLAs). CI
operates in 31 countries and works with 850 retailers like
The Channel Intelligence deal shows that e-commerce is
becoming an important part of Google's strategy. The acquisition
will enable Google to better compete with the likes of
) by offering its customers a better shopping experience. The
service will save time for customers by helping them find the
best product deals on the Google Shopping search engine.
Google is a market leader in online advertising and it has
been exploring various ways to increase its revenues and fight
competition. The company has stepped up its efforts in the
e-commerce space. In Jun last year, the company announced that
retailers would have to pay for space on Google Shopping in an
attempt to improve ad quality and help merchants maximize sales
from ads purchased on Google Shopping.
Google has done well in the fourth quarter, with its gross
revenues touching a record $14.4 billion. Revenues from both
Google-owned and partner sites, continued to grow in double
digits on a year-over-year basis.
Though Google is the No. 1 web-search engine, it lags online
retail giants Amazon and eBay in terms of shopping-related
searches. So, we believe the CI acquisition is a part of the
company's ongoing efforts to improve on the Google Shopping
However, legal entanglements related to competitive matters or
patent infringements remain an overhang. Currently, Google
retains a Zacks Rank #3 (Hold).
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