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Twitch Deal: Its Amazon and not Google

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Amazon outwits Google in battle for Twitch

On July 25, we reported that Google Inc. (NASDAQ: GOOG) was in the verge of acquiring Twitch for $ 1 billion fee. Things seems to have taken a different turn and now Twitch has confirmed that it has been acquired by Amazon.com (NASDAQ: AMZN) instead. It is emerging that e-commerce giant pounced on the deal after Google and Twitch arguably failed to agree on a breakup fee due to the antitrust issues.

Google has courted Twitch, a video game streaming website, since May when the first reports emerged that the two tech companies were in talks. While neither Twitch nor Google ever confirmed these reports in public, VentureBeat confirmed the deal saying it was only awaiting official confirmation.

Amazon Twitch Deal

On Monday Amazon confirmed the deal is happening. The e-commerce giant said in a press release that it is investing in Twitch, which dominates the online video streaming.

Twitch CEO Emmett Shear has also confirmed that Amazon has acquired his company. Through a statement posted on the company websites, he praises Amazon and justifies why the company accepted the e-commerce company’s offer.

“Today, I’m pleased to announce we’ve been acquired by Amazon. We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster.” – Emmert Shear, Twitch CEO.

“Like Twitch, we obsess over customers and like to think differently, and we look forward to learning from them and helping them move even faster to build new services for the gaming community.” – Amazon CEO Jeff Bezos.

Amazon will pay $970 million in cash and potential add ons that may value the whole deal at $1.1 billion. The deal will be completed next year.

Amazon and Google battle on all fronts

The Twitch deal is just but one battle among the many battles these two American tech companies are involved in.

While both companies were conventionally not rivals, both companies have diversified their portfolios through innovations and acquisitions that they are now obvious rivals. Amazon’s co-business is e-commerce, while Google’s is digital marketing.

After acquiring Nest labs, Google now makes thermostats and smoke alarms, it has invested in Smartphone market through its Android Operating system, it operates an online retail store known as Google Shopping Express and it is still the leading digital medium of advertising. Amazon on the other hand ventured into electronics, has recently revamped its digital media investment especially T.V. programs, and is working on delivery drones. Google and Amazon are already offering same-day delivery in select markets for their retail sites.

Why Google wanted Twitch

Had Twitch deal gone through as thought, Google would have folded the live video game streaming service into its video division, YouTube. Twitch is YouTube’s biggest challenger in broadcasting and live-streaming on-demand videos, especially game sessions. Nevertheless, Google’s video unit is the world’s largest and most-visited content streaming website.

Gamers have preferred to use YouTube for posting game ads, highlights and tutorials, while using Twitch as the live broadcast platform. More than half of Twitch viewers spend at least 20 hours a week watching, with every viewer watching 106 minutes per day on average. In short, gamers spend more time on Twitch than YouTube. Consequently, fusing the two video giants would not only have helped the search engine giant eliminate competition, but also expand its video community.

Conclusion

The Twitch deal is strategic for Amazon given its recent foray in digital media. This acquisition will definitely help Amazon in its quest to become a heavyweight in digital advertising, a market which is currently dominated by the search Company.  To Google, missing Twitch is not just a big miss, but losing 50 million potential online viewers to its now sworn rival, Amazon.

11 Main: Alibaba’s answer to Amazon and eBay

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Will Alibaba’s 11 Main tackle Amazon and eBay?

Exactly a month ago, Alibaba Group Holdings (pending NYSE: BABA) launched a U.S. shopping website 11 Main, in its foray into the home turf of established e-commerce giants Amazon.com Inc. (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY). The Chinese e-commerce giant is readying for its stock debut in the U.S. on the New York Stock Exchange in what is poised to be the largest tech IPO in history.

11 main is still just available to invites only. You can create an account with them but until you get an invitation you won’t be able to shop on the site. The company is yet to communicate when it will become fully operational. However, as at now, it hosts over 1,000 merchants, whom the company say, were able to meet its strict merchant requirements. It is continuing to vet and add more merchants.

While many analysts believe Alibaba is a big player that cannot be underrated, they underline the importance of major acquisitions if 11 Main is to pose any major challenge to established players in the U.S.

Talking to Wall Street Journal, Forrester Research analyst Zia Daniell Wigder said it will be difficult for Alibaba’s 11 Main to break into the U.S. e-commerce market as it already have established players and mature growth rates.

“It’s far easier to be disruptive in an early-stage market where the landscape of leading players is still in flux and growth rates are high,” said Ms. Wigder.

11 Main Features

Here is what 11 Main currently offers:

Appearance: Have you ever shopped at Etsy or Gilt? 11 main is as shrewd as Etsy and as sparkling as Gilt. It is clean and more polished than its sister Chinese sites Taobao and Tmall, which are colourful and cluttered. After all, it has been designed by firms that understand the US market, Vendio and Auctiva.

Business Model: Being a segment of Alibaba, it only acts as marketplace where small retailers hawk their products. So the site has small merchant shops, where you can browse and favourite items.

Site plan: The products are arranged in nine broad categories that appear as tabs. The categories include:

  • Fashion
  • Home
  • Jewelry
  • Baby
  • Collecting
  • Tech
  • Sporting goods
  • Toys
  • Entertainment

The above categories are further divided into sub-categories. There is also keyword search box at the top corner to help you find a specific product.

Charges: Being a debutant, the site is trying to lure in more merchants by charging only 3.5% as commission on goods sold. Most e-commerce sites in the U.S. charge double or even triple this rate.

Conclusion

Alibaba, known for its financial muscle, has set off a lot of speculations on how it will affect the U.S. e-commerce market. Its new US segment is expected to break the curse associated with this market where debutants hardly make an impact. But will 11 Main create enough buzz to lure in online shoppers who are used to shopping at eBay, Amazon and other e-commerce sites or sophisticated shopping sites operated by break and mortar departmental stores?

Google takes Supremacy Battle to Amazon’s Doorsteps

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Google Introduces overnight delivery across Northern California

overnight delivery, Google Store, GoogleOn Tuesday,Google (NASDAQ: GOOG) announced that its internet retail business will be offering overnight delivery in Northern California. This comes in hardly a year after the internet maestro launched its Shopping Express service.  Back in September, Google begun offering same day delivery, and now these services are available in parts of Los Angeles and New York in addition to the default areas, Silicon Valley and San Francisco. This new move is likely to be interpreted as declaring war on Amazon.com Inc.’s (Nasdaq: AMZN) area of dominance.

While Amazon has its own warehouses filled with its inventories, Google work with chain stores, for instance Target, Staples, Walgreens and Whole Foods. However, as the search engine giant continues to expand its online retail business, Amazon has every reason to be cautious.

Google’s Overnight Delivery

Google’s overnight delivery is available in a number of cities on the opposite side of the bay, right from San Francisco, as well as Oakland and Berkeley. This service is expected to expand further to Crescent City – next to Oregon border – in the North, and Fresno and CA’s Central Valley in the south. Only orders placed by 7:00 p.m. will be delivered the next day. The internet giant turned online retailer also targets Yosemite and Big Sur, which the company considers as its prized wilderness destinations. However, deliveries on such destinations will be made possible through “major shipping carriers.”

There is no company that is comfortable with Google sniffing around. Just a few years ago when Google entered the Smartphone world, everybody thought that Apple Inc. (NASDAQ:AAPL)was several years ahead of it and it would take the company ages to reach that level. As we speak, Android Smartphones have outnumbered their iOS counterparts, and even Google Play App store has beaten iOS in number of downloads – one thing that many other players have failed to do.

Why Online Retail is Good for Google

For the past couple of months, there have been a few headlines that have taken punches at Google. Its leading Android phone maker, Samsung, is soon launching Samsung Z, which uses Tizen operating system. This could derail Google’s quest to be the dominant player in the lucrative Smartphone business. The new operating system could also see Samsung stop making Android phones, which is a big blow to Google.

In other news, Apple Spotlight search tool will be replacing Google as Spotlight’s web search provider with of Microsoft’s (NASDAQ: MSFT) Bing. Apple is probably doing this to reduce its customers’ dependency on Google as the default search engine.

With the future not looking very rosy for the internet giant, online retail could a good line of business. Given Google’s big name and the point-to-point delivery style it has taken, this new line of business could really work well. If its decentralised model, which uses shopping retail stores, can work, then Google will also have solved the toughest math problem that online retailers often face, which is logistics.

Conclusion

The race to capture American retail market is underway, and not only for American retailing companies, but also international companies. Soon, Amazon will also be taking blows from Primark, the Irish clothing retailer, and Alibaba, the Chinese internet conglomerate tipped to be second only to Google in terms of its sheer size.

Google is a strong brand with internet omnipresence, and it therefore brings Amazon a rare challenge. It is only a matter of time before its internet retail business becomes a more conventional ecommerce rival to Amazon.