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Why Google Inc (GOOG) Needs a Retail Operation: Apple Inc. (AAPL), Best Buy Co., Inc. (BBY)

First it was Samsung, then Microsoft Corporation (NASDAQ:MSFT). Will Google Inc (NASDAQ:GOOG) be Best Buy Co., Inc. (NYSE:BBY)‘s next partner?

That’s what plugged-in tech blogger Robert Scoble is hearing. According to his sources, Google Inc (NASDAQ:GOOG) is going to rent out 6,000 square feet in multiple Best Buy Co., Inc. (NYSE:BBY) stores next year. Although it’s just a rumor, it would make a lot of sense — as Google Inc (NASDAQ:GOOG) gets into hardware, it’s going to need a dedicated retail operation.

And as more tech giants partner with Best Buy Co., Inc. (NYSE:BBY), the case for the once-dead retailer continues to strengthen.

Google Inc (NASDAQ:GOOG)

Why Google needs a retail operation
To be clear, Google Inc (NASDAQ:GOOG) is still a search company. Its search engine continues to generate nearly all of its revenue and profit. But it has begun to branch out into hardware. Google Inc (NASDAQ:GOOG) makes an Ultrabook, the Chromebook Pixel, and a media-streaming device, the recently released Chromecast. It doesn’t actually make the Nexus hardware (LG makes the 4, Asus makes the 7, and Samsung makes the 10), but they’re branded as Google Inc (NASDAQ:GOOG) devices.

Of course, Google’s most ambitious device isn’t even out yet. Its high-tech, somewhat controversial, Google Glass is coming next year.

If Google is going to sell these devices, it’s going to need a retail arm. As the success of Apple Inc. (NASDAQ:AAPL)‘s retail operation has demonstrated, electronics makers do best when they take the retail operation into their own hands.

Especially with Google Glass. Given that it’s such a revolutionary device, it seems unlikely that consumers are going to buy it before they test it out. Brick-and-mortar retailers have struggled to sell electronics in recent years, but perhaps that’s because the devices being sold have not changed significantly.

If you’re buying another TV, tablet or smartphone — sure, go online. These devices are fairly well understood. But buying Google Glass? You’re probably going to want to try it on first.

Best Buy’s biggest liability is now its biggest asset
Earlier this year, there was a rumor that Google was considering building its own dedicated retail operation. I wrote that, if such an outcome came to pass, it would spell the end for Best Buy Co., Inc. (NYSE:BBY). With Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and now Google planning individual stores, there would be little need for Best Buy Co., Inc. (NYSE:BBY).

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