Google is moving deeper into e-commerce. On Wednesday, it announced it has agreed to acquire Channel Intelligence, a company that provides services to online retailers, for $125 million.
Google hopes the company will help it improve Google Shopping, its comparison shopping service, which it has recently revamped and which has weathered criticism.
Channel Intelligence, which is part of ICG Group, helps clients, including Target, Neiman Marcus and Best Buy, promote their products across the Web, and says it is responsible for $2 billion in online sales a year. Among other services, it helps retailers manage their product listing feeds on comparison shopping sites, including Google Shoping, and add a “where to buy†button to Web sites.
Late last year, Google began charging retailers to show their products on Google Shopping, which Google said would improve the quality of the listings.
While some retailers say their sales increased as a result and the new ads contributed to Google’s fourth-quarter revenue, the change has also had some downsides. Many users say that Google Shopping is at times a worse experience for consumers because it now shows an incomplete selection of items, based on which retailers have paid for inclusion. And for retailers, especially small ones without vast advertising resources, it is sometimes prohibitively complicated to manage yet another ad campaign.
Channel Intelligence could help retailers improve their product feeds â€" choosing which products to feature, for example, and including photos, sizes, colors and other information â€" and bid for advertising space on Google.
Google declined to say how it would integrate Channe! l Intelligence into the company. In a statement, Google said, “We want to help consumers save time and money by improving the online shopping experience. We think Channel Intelligence will help create a better shopping experience for users and help merchants increase sales across the Web.â€
The acquisition is Google’s latest effort to take on Amazon.com, which has become an archrival in shopping search. A third of shoppers start their searches on Amazon, compared with just 13 percent on a search engine, according to Forrester Research. That’s a shift from several years ago, when a quarter started shopping research on a search engine and 18 percent on Amazon.
It is also the latest example of Google’s moves into building vertical search engines for searching certain topics, like local businesses, flights or shopping. Google’s stiffest competition has come from these types of businesses, like Yelp, Kayak and Shopping.com.
