Google's Buy Button, The Transactional Market And Competition From The 'Triple As'

Google Inc (NASDAQ: GOOGL)(NASDAQ: GOOG) is attaching a "buy" button to search results of products on its mobile site. Colin Sebastian, analyst with Robert W. Baird & Co, was on CNBC Tuesday to explain why this move makes sense for Google.

Benefits

"There are several reasons why it makes sense for Google to test this buy button," Sebastian said. "Number one, from a user's perspective, it may be more convenient to purchase products directly from the search results page as opposed to clicking through the apps or mobile websites."

Related Link: Google To Place Buy Buttons On Search Result Pages

He continued, "Secondly, from the retailers' perspective, they should benefit from more transactions. And also, there is the issue of competition from Amazon, and so Google helps to balance that competition.

"For Google, there is tremendous benefit from the data as well as competing more aggressively in e-commerce."

Competition From The Three As

Sebastian was asked what Google is trying to achieve or become by this move in the e-commerce space. He replied, "To some extent, retailers are accustomed to advertising. Alibaba for example, this is the model for their marketplace. Secondly, [...] Google is going to share key customer information with retailers. In fact, the transactional pages on Google, on the app, will look like they are branded by the retailer to some extent.

"From Google's perspective, they face this competition from what we call the 'Triple A' – Amazon, Alibaba and Apple. So they really need to be in the transactional market. I mean, there are buy buttons popping out everywhere online – on Facebook, on Twitter, on Pinterest. So they need to be there," Sebastian concluded.

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