Amazon.com, Inc. (NASDAQ:AMZN)’s core business is being threatened by another web giant, Google Inc (NASDAQ:GOOGL), Ken Sena of Evercore Partners said in a discussion on CNBC.
According to Sena, people will be looking forward to Amazon.com, Inc. (NASDAQ:AMZN)’s imminent quarterly performance report but they will also be scrutinizing the guidance of the company for the coming quarter.The analyst said that what he would be most interested in among the facts that Amazon would report is its performance in the retail side of their business. However, Sena also mentioned that Google Inc (NASDAQ:GOOGL) is actually a threat to the electronic commerce giant in this space.
“We still have a ‘Buy’ [rating] on Amazon [but] we don’t add it to our sort of ‘super conviction’ list and the reason is that we really are seeing a lot of changes in the environment that are not good for Amazon. I think 20% of Amazon’s traffic does come from Google. Google is making it harder for players like Amazon to capture that traffic and take that consumer out of the Google experience and convey them elsewhere,” Sena said.
According to the analyst, if one is talking about Amazon.com, Inc. (NASDAQ:AMZN) as a retailer, Google Inc (NASDAQ:GOOGL) is a very similar player because people are going to these companies’ experience to search for products. Google’s move into electronic commerce is a legitimate threat to Amazon, he implied.
“Google really wants you to look for that product on Google. If you don’t see that product on Google, you find another product on Google. I think the integration that they are doing right now with sellers and the direct feed of inventory information that Google is kind of piping into its platform is a serious concern for Amazon. I think it’s why you see Amazon feeling like they have to invest in content, hardware [and] locations in terms of physical stores,” he added.
Amazon.com, Inc. (NASDAQ:AMZN) is expected to report its performance for the third quarter of 2014 after markets close today. Google Inc (NASDAQ:GOOGL) reported its third quarter 2014 performance last week.
John Griffin’s Blue Ridge Capital is an Amazon.com, Inc. (NASDAQ:AMZN) shareholder. It reported 810,000 shares in the company by the end of the second quarter. Also in the same period, 259,610 Class A Google Inc (NASDAQ:GOOGL) shares were reported to be owned by Stanley Druckenmiller’s Duquesne Capital.