Google Inc. is in at war with Amazon.com. The giant retailer is threatening a large part of Google’s revenue stream with its Echo and Alexa-two of Amazon’s voice recognition home assistant.
Google relies on adverts placed on top of the Google search page. This accounts for almost 90% of its revenue. If searches and purchases are made via Echo, google misses on the ad revenue.This has not been helped by the shift to mobile searches and dedicated apps for various websites.This comes as google still wonders how to convert the potential of voice technology to real revenue.
As Alphabet-the parent company to Google will be announcing their revenue late January, the big question on the minds of most analysts is not how many boxes Amazon sold or how many Google searches were made in the year 2016 but who is really winning the fight to control your home.
Amazon is fielding Echo with its voice assistant Alexa while Google is bringing Google home to the fight. The two home based devices are internet connected and have the ability to send commands to connected “smart” devices like light bulbs and doors, play music, update shopping lists and read out headlines.
Amazon is currently leading in the battle with its Echo device launched at the end of 2014. Analysts puts the amount of Echos sold at 11 million for the period up to November 2016, two years after the launch. Morgan Stanley-an investment bank puts the sales of Google’s Google home at less than a million since its launch in October 2016.
With Amazon having a head start, it is estimated that the Echo voice command device is in 8 of American homes. Voice is the next big thing in device technology for computer interaction with human beings. Research Company Gartner estimates interaction with computers using voice to be at 30% by 2018. Voice commands are generally 4 times faster than typing.
Despite the battle, google is still grappling with the challenge of monetizing the Voice service as it is impossible to bring adverts in the voice reply. It is a race google has to run to make sure Amazon does not become the default and industry standard for control of home devices.
Apple has confirmed through its vice president of Marketing that it is not going to follow suit.
“Having my iPhone with me as the thing I speak to is better than something stuck in my kitchen or on a wall somewhere.”