Gartner: Googazon Could Dominate Web Retail

By Stan Gibson  |  Print this article Print


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At the Gartner Symposium/ITxpo, one analyst suggests that Web 2.0 consolidation could lead to a single entity controlling half of all online transactions.

ORLANDO, Fla.—As the World Wide Web evolves into a collection of Web services, one or two huge players could come to dominate retail search. Gartner analyst Hung LeHong laid out that scenario at the annual Gartner Symposium/ITxpo here.

"It's a scary scenario. A few major players could take over Web 2.0," said LeHong, suggesting that a merged entity such as Google and Amazon—call it Googazon—could mediate half of all online transactions.

LeHong termed such a role "pretailing," or serving as the place where consumers would search for a vendor and compare prices and special offers before buying.

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"Googazon will sit between your customers and your company. It will be able to provide access to all retailers. It will close 30 percent of transactions and guide 50 percent of purchases in any channel. It will force full retail transparency, and will dictate how we compete," LeHong said.

By 2016, he said, "You will need to work with Googazon."

A Googazon could help consumers by finding deals and matching them to the buyer's financial profile.

Read more here about analysts' predictions at the Gartner Symposium/ITxpo, including a firm warning to cut infrastructure costs.

Although Google might evolve in this direction on its own, LeHong said, the company does not yet have the retail credibility of Amazon.com, which would be needed to generate trust among both buyers and sellers—hence, his suggestion that the two companies could combine.

The danger, however, is that Googazon could become a dominant market force not unlike Wal-Mart in conventional retailing today. The marketing muscle that such a company could exert on buyers and sellers could limit consumer and vendor choices, he suggested.

In order to counteract the retail transparency that Googazon might bring about, he said retailers might try dynamic pricing, or changing prices from time to time depending on demand, and they might also try to create complexity by putting together bundles of products and services that might defeat easy comparison. Another alternative would be to create customer loyalty programs as airlines do.

LeHong said other entities could emerge, such as "service-jackers," who could invoke others' Web services for profit.

LeHong's predictions were part of the so-called "Maverick Track" of presentations at Gartner's Symposium, those that feature more speculative, visionary and imaginative views of the future.

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Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on Zcast.tv. He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

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