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Google fights to unseat Amazon as the top online mall

Whether you are looking to buy a power tool or neon jeans online, chances are you start your search on Google (GOOG) or But which one?

Behind the scenes, the two companies are waging a war to become the pre-eminent online mall. And e-commerce sites large and small are caught in the crossfire. As for consumers, the question is whether they will see a full range of products available online.

Google is a search engine, not a store, but it is increasingly inching into e-commerce with products like its comparison-shopping service, Google Shopping. At the same time, more people are using Amazon, a retailer, as a search engine to look for what they want to buy.

Trying to stave off the competition from Amazon, Google has recently changed Google Shopping to require e-commerce companies to pay to be included in shopping results, so product listings are now ads. Inclusion used to be free. If a company does not pay to be listed, consumers will not see what they have to offer.

Google says the change will improve its shopping results because retailers are more likely to list accurate and up-to-date items if they are paying. It says the service had become polluted with product listings that were out of date or misled consumers about things like shipping prices.

By requiring retailers to pay for listings, "incentives are aligned to make sure the data we're receiving is of a higher quality," said Sameer Samat, vice president for product management for Google Shopping, which used to be called Google Product Search and, before that, Froogle. "With better data, we can build a better experience for users." Although some retailers agree, and say the move could even help their sales, others are panicking. Some say they will not pay for listings or will include fewer products, which could shrink the selection shoppers see on Google.

"If you're a retailer and you don't have the budgets of an Amazon, eBay, Best Buy or Wal-Mart, it's going to be really challenging," said Gerry Bavaro, senior vice president for performance media at Digitas, whose clients include Procter & Gamble.

If retailers slash the number of products they list on Google, shoppers could hunt elsewhere -- like Amazon -- for more comprehensive listings.

"Eventually someone says, 'I'm not going to pay,'" said Kristopher Kubicki, co-founder of Dynamite Data, which monitors e-commerce sites for its retail clients. "And sooner or later, the consumer stops trusting the application because it's not really a comparison anymore. It's just an ad."

Posted on: 14 Sept 2012, 11am IST

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