Google recently announced it is acquiring Channel Intelligence, an ecommerce data service, for $125 million. Google says it wants to improve the online shopping experience for both merchants and shoppers.
How good the acquisition will be for small merchants and consumers remains to be seen. One thing seems clear: this Google ecommerce play will likely help the search giant compete against Amazon and eBay in ecommerce.
What Channel Intelligence Does
Channel Intelligence (CI) helps retailers sell their products online through various channels and services. Simultaneously, it tries to make it easier for consumers to find products they want to buy.
Services offered by CI include “where to buy” buttons that sellers can include on their websites. Their services also help merchants to promote their products and get found on shopping search engines such as Google Shopping.
CI and Google have already worked together for years, as CI was one of the original Google Shopping launch partners.
Why the Acquisition is a Google Ecommerce Play
If you, like Google, owned a shopping search engine, wouldn’t you want to discourage shoppers from going directly to competing ecommerce sites like Amazon and eBay — and encourage them to instead search Google? The more consumers who search Google Shopping and find what they want, the more valuable that shopping engine becomes. CI’s technology and know-how are a path to increase that value.
With CI’s technology and services, Google Shopping will be in a position to provide more marketing and selling tools to businesses that use the platform. This will make Google Shopping more attractive to merchants. And that of course, means more revenue for Google. Google Shopping switched over to having exclusively paid listings in September 2012. So the only products featured on Google Shopping are those from merchants who pay for the privilege.
Also, as Search Engine Land notes, it is likely that eventually CI’s services will be available only for Google Shopping, and not competing shopping engines. That could give Google Shopping an edge against its competitors.
Net result: Google gets a bigger slice of the ecommerce pie.
In a post on the company’s blog, the CI team said that it will continue offering its services to clients. It doesn’t say clearly whether such services will be exclusive to Google Shopping or available for other competing search engines and shopping services. The deal is expected to close in the first quarter of this year.
ICG Group Inc. and Aweida Capital Management are currently the joint owners of Channel Intelligence. The company is based in Florida and has additional offices in Phoenix, London and Shanghai.
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