Alphabet (NASDAQ: GOOGL) stock rose after an announcement by the company to make major changes in the way it handled e-commerce listings.
According to a report by Investors, GOOGL stock prices jumped 3.8% on Wednesday in response to Alphabet’s proposal to keep pace with Amazon (NASDAQ: AMZN) in the space of digital advertising.
Google Commerce President Bill Ready announced in a blog post that businesses will essentially be able to list products on Google’s shopping feature for free moving forward.
The post reads,
In light of these challenges, we’re advancing our plans to make it free for merchants to sell on Google. Beginning next week, search results on the Google Shopping tab will consist primarily of free listings, helping merchants better connect with consumers, regardless of whether they advertise on Google.
Cowen analyst John Blackledge said the decision by Google was in response to Amazon’s growing control over the market for e-commerce.
He wrote in a note to clients,
As Amazon continues to see rapid growth in its advertising business and arguably becomes more of a default lower funnel starting point for many products for consumers and particularly Amazon's Prime subscribers, we think Google's move is also a response to help the platform draw in additional consumers and retailers.
Colin Sebastian, an analyst at Baird, said the move was “clearly aimed at improving the consumer and merchant experience,” while eating into Amazon’s share of e-commerce searches.
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