Amazon cares about pushing products while Google cares about pushing advertising.
“Amazon wants to sell stuff to me â whether its content, services, or products â 24-hours-a-day,” says Gartner analyst Werner Goertz. It wants to be a platform that “takes a cut of all economic activity.”
By selling low-cost smart home devices of all types, Amazon feeds its services and retail business, whether through getting more people to sign up for a Prime subscription or using its home services unit for installations. Being the backbone of your home will help as it expands to sell you everything you might possibly need: groceries, pharmaceuticals, and more.
Sure, Amazon is an an up-and-comer in online advertising, expected to book more than $4 billion this year, and has started experimenting with sponsored Alexa ads, but it’s still early days.
Google, on the other hand, booked more than $54 billion in advertising revenue in the first half of 2018 alone.
As more people start interacting via voice instead of screens, Google’s advertising engine needs to be ready to adapt. Having its platform in your home not only means it’ll have new ways to serve ads, but will also let it collect new types of dataabout its users, which is used to better target advertising for its users across all form factors.
Google does not need to pressure its already shrinking margins by building a bunch of new products just to serve ads and collect data — it’s much cheaper rand just as effective to form partnerships and let its software do the work.