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Is Amazon.com, Inc. (AMZN) Becoming A Threat To Alphabet Inc (GOOGL)?

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Is Amazon.com, Inc. (NASDAQ:AMZN) Stock A Better Bet Than Alphabet Inc (NASDAQ:GOOGL) Stock In 2017?

– In 2016, GOOGL stock only managed to deliver a return of 4.35%, whereas AMZN stock delivered a return of 17.72%.

– With its latest ventures, Amazon.com, Inc. (NASDAQ:AMZN) is eating into Alphabet Inc (NASDAQ:GOOG)’s territory, and things may get worse for Google.

– Can Alphabet Inc fend off Amazon and deliver better returns to shareholders in 2017?

Amazon.com, Inc. (NASDAQ:AMZN), icon, app, mobile screen, shop, logo, website, sign, symbol

Alexander Supertramp / Shutterstock.com

2016 was not a great year for Alphabet Inc (NASDAQ:GOOGL), and the company’s stock price has not moved much in the last twelve months. Although the company generated $17.1B in operating income and $64.2B in revenue through the first nine months of its current fiscal year, the stock only managed to deliver a return of 4.35%, compared to the NASDAQ’s 9.79%. That’s nowhere near the kind of returns the stock has generated in the past. Amazon.com, Inc. (NASDAQ:AMZN)’s latest initiatives with Alexa are eating into Google’s territory and it appears as if AMZN stock could be a better investment in 2017 than GOOGL Stock. Can Amazon.com, Inc. really dent Alphabet Inc?

Google Losing Out To Amazon In E-Commerce Search

According to a report by BusinessInsider (1), Amazon is slowly taking a sizeable chunk of Google’s search business by becoming the go-to place for e-commerce search. As per the report, “more than half of people start their search for online shopping on Amazon now, while only 26% use search engines like Google as the starting point”. Google is a search company, which makes more money when a larger number of people use its search engine. Now by losing market share in e-commerce search, Google is taking a hit on its revenue, as it is primarily dependent on search-advertising to generate revenue. The report gives more details about the trend, but what is more worrying for Google is that its e-commerce search-share has halved in last two years, whereas Amazon has gained drastically in the same period ( see image below). This is a serious concern for Google, and it appears as if things are not going to get any better in future. (See Also: Alphabet Inc’s (GOOGL) Next Growth Cycle Is Closer Than You Think).

screen shot 2017-01-06 at 101941_GOOGL

Source: Business Insider

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