Amazon Pulled out of Google Shopping for AI, not for Advertising

If you have the largest data catalog in the world, why would you give to your top AI competitor? I believe that is the question that Amazon is asking itself at the moment. The performance marketing agency world is only speaking about how DTC should now take advantage, and not much is being talked about as to why.

Some are even saying silly things like: "I bet Amazon just found people search it anyway." Uh, no. That would have been true 5 years ago, too. And the world is different now.

There really can be only two plausible reasons that Amazon pulled out of Google Shopping.

1 - Amazon is in the process of negotiating terms to its data with Google. And expects Google to pay up handsomely. After all, it hasn't even been two weeks since Amazon removed access to all the bots and agents from its website.

Essentially, Amazon is going to eventually play ball with the agents, but is using this to make a point and get them favorable terms at the negotiating table. These terms could be use of data, or literally just a financial payoff. Likely both.

2 - The other explanation is that Amazon plans to compete directly with Google (and others) for the first AI search. In this case, if you have the most complete, attribute and data-rich catalog in the world, why do you just hand it off to your competition and help them in your AI journey?

What we have here at this moment is an opportunity for Amazon. Amazon has been taking first-search share of product searches from Google for many years now, but Google is still the king of search. If search becomes a multi-polar world, I believe Amazon would be one of the biggest beneficiaries of that trend.

But let's face it, they can (and will) compete with them anyway while at the same time extracting a lot of money/terms from Google for the privilege of using its data. As a result, it feels more likely to me that the true reason is the first one. In other words, Amazon's Google ad budget is being used as a negotiating chip in a data licensing war.

Let the partnership discussions begin! Both do need each other in some way.