We already knew that Google (GOOG) couldn't be too pleased with Amazon (AMZN) forking its Android OS and leaving out any trace of Google's apps and market, while piggybacking on its development costs. We also knew that Google's couldn't be happy with Amazon's growing threat in product search and advertising.
But a recent series of moves by Google leave open another wild hypothesis. Has Google actually decided to put Amazon out of business or something? Why do I say this? Let us go over Google's moves towards Amazon in the last year, one by one.
Google launched the Nexus 7 tablet
The Nexus 7 tablet, priced at $199, was a direct competitor to Amazon's Kindle Fire. There was no if there. The pricing was the same, the size was the same, it's pretty obvious that Google launched this tablet to target Amazon's market. Obviously the tablet carries proper Android, with access to Google's entire ecosystem, contrary to Amazon. Since Amazon was supposedly pricing its Kindle Fire near breakeven, Google had to accept similar profitlessness to enter the segment at the same price point.
Google entered a price war for cloud services
Again, there's little doubt who the main target was. Google lowered prices twice near the end of 2012. At this point, Google claims to have pricing of as much as 50% lower than its competitors … that is, Amazon's AWS.
It's hard to directly compare pricing as there are hundreds of possible services and variations, for instance just for compute services we have the following for Google, but what is certain is that prices have been recently going down hard driven by Google's initiative.
Google is preparing Google Shopping Express
Google Shopping Express is at the same time a potential competitor to Amazon's ecommerce sales (1P), third party sales (3P) and Amazon's Prime membership program. Not only so, but Google Shopping Express is rumored to be priced lower than Amazon's Prime membership. If such comes to pass, Amazon would have to respond and that would make for a direct hit to Amazon's already puny earnings.
Google has Google Play
Google Play is a direct competitor to Amazon's media segment. Over time, Apps, books, music and videos will only be available digitally. And most of these will tend to be bought not from websites, but from OS-integrated stores like Google Play and iTunes. Already, Amazon has seen a large drop in ebook share due to iBookstore from Apple gaining share. Google Play, launched during 2012, aims to do the same in the Android field.
Google Play was a natural evolution, following in the footsteps of iTunes, and thus not really targeted at Amazon. Still, the effect is the same. Amazon is a prime loser in this battle.
Finally, something which might still happen
For now, the sale of digital goods using OS-integrated stores is the most direct menace to part of Amazon's business. But Google, beyond looking to get a cut on each advert, transaction and payment for physical goods, might actually be targeting something much greater. What if Google also integrates its Google Shopping Express into Android? It seems like the rational thing to do - not only would you get your digital media through an OS-integrated store, but you could also do your shopping in a OS-integrated store, together with your home inventory management and things like that.
This seems like a natural evolution for Google's concept. And it would also be something which Apple would be forced to emulate right after, so as not to have its iOS at a comparative disadvantage. Over time, this would move e-commerce from websites to OS-integrated apps which would then redirect the orders towards physical, local, bricks & mortar retailers, who'd service them on a same-day delivery basis. This would certainly spell doom for Amazon, much like the integration of digital goods sales into the OS is already making it hard for Amazon media sales to grow.
On purpose or not, it would seem that Google has been launching an incredible number of initiatives whose ultimate target seems to be Amazon. As these pile up, the effects on Amazon might turn from minor, to noticeable, to dramatic.
Obviously, Google's resources greatly outweigh Amazon's, from Google's $10.8 billion in net earnings versus Amazon's zero to its $41 billion net cash hoard versus Amazon $7 billion or so (and seasonally pumped up at that).
Disclosure: I am short AMZN.