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Google drops charges on shopping service to counter Amazon’s surging ad sales

SAN FRANCISCO (Reuters) – Google said on Tuesday it would stop charging merchants to place products on its Google Shopping search page as it looks to win e-commerce advertising business from Amazon.com Inc and other online retailers, just as they are struggling to supply customers with some items due to the coronavirus pandemic.

FILE PHOTO: The logo of Google is seen in Davos, Switzerland Januar 20, 2020. Picture taken January 20, 2020. REUTERS/Arnd Wiegmann

The move is the latest effort by Google to reinvigorate its Shopping service, which has been largely eclipsed by Amazon.com, where most online shoppers now start searches for products and merchants pay to feature prominently.

Google, part of Alphabet Inc, has up to now charged merchants whose products appear when users click on the Shopping tab on Google’s search engine. Amazon, which charges merchants only to promote items high on searches but takes a cut of their sales, is increasingly eating into that business.

By adopting a system akin to Amazon’s, Google is hoping more merchants will put their products on its service, which will attract more shoppers and ultimately increase ad revenue as merchants vie to be featured.

“If you work with the ecosystem, there will be monetization opportunities that come on top of that,” Google’s president of commerce Bill Ready told Reuters in an interview.

The new policy had been in the works for some time, Ready said, but was brought forward as some stores struggle to find buyers because of the virus. Some merchants said they lost sales during the outbreak when Amazon.com stopped offering fast shipping on some products so it could prioritize what it called essential items.

Google’s plan will take effect next week in the United States and by the end of the year globally.

The move is a gamble for Google, as it may lead to a short-term loss of advertising revenue and does not guarantee an influx of new customers.


Google executives have debated for months how best to push back against Amazon.com, rejecting the idea of spending billions of dollars to revamp the Google Shopping service, according to previously unreported accounts from 12 current and former high-ranking staff.

Staffers last year explored partnerships with delivery companies to match Amazon’s speedy shipping, but did not get the go-ahead from top executives to strike a deal, one source said.

Amazon has invested heavily in stocking warehouses and delivery drivers at the expense of its gross profit margins, which stand at about 40 cents on every dollar of revenue, according to Refinitiv data.

Google, which has no experience of such a physically intensive delivery operation, balked at a similar type of investment, which would cut its profit margins of about 60 cents per dollar of revenue, three sources said.

“It’s daunting the amount of capital and expertise it would take to run such a business, and even if you’re successful, are you just going to be No. 2?” said Jon Venverloh, who left Google last summer after 18


Car Carrier Wallenius Wilhelmsen Drops 14 Ships on Tumbling Automotive Demand

International car carrier

Wallenius Wilhelmsen

will cut its fleet by 14 vessels as automobile production and demand nosedive around the world amid the coronavirus pandemic.

The Oslo-based shipowner, one of the world’s biggest car movers with a fleet of 125 ships, said it would scrap four vessels and idle another 10 as auto manufacturers halt production at plants and many countries lock down economic activity. The company said it will also suspend dividend payments this year and next to preserve cash.

“The world has changed dramatically over the past weeks, and we are all feeling the effect,” said President and Chief Executive Craig Jasienski. “The impact these events will have on the world economy and global supply chains remains unpredictable, but it is increasingly clear that current events will have longer term impacts.”

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The company, which employs more than 9,000 people in 30 countries, is also a major logistics provider for vehicle makers, operating 120 processing centers and a dozen marine terminals that handle the flow of thousands of cars, trucks and heavy machinery across the world.

Car movers were expecting a flat year before the virus hit, following the impact of the U.S.-China trade dispute and a weaker economic outlook.

Wallenius Wilhelmsen said it would save $60 million from halting two annual dividend payments.

“We are taking early precautionary steps now, to preserve cash,” Mr. Jasienski said.

Auto makers have suspended production at factories in North America and Europe in the past week, following actions in China to shutter assembly plants there earlier in an outbreak that has now gone global.

Detroit car companies said last week they would halt factory operations until at least March 30 to clean facilities and develop other preventive measures to limit the virus’s spread.

Honda Motor Co.


Toyota Motor Corp.

also said they would temporarily halt production in North America.

The plant closures are cascading down automotive supply chains, including parts makers and transport providers, already under strain this year from reduced consumer demand for automobiles.

Wallenius Wilhelmsen shares were off 9.9% Monday, trading at 7.75 Norwegian kroner (69 cents) on the Oslo Stock Exchange.

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