Alphabet’s (GOOGL - Free Report) strategic investment in China’s JD.com (JD - Free Report) and its Carrefour partnership boost its Google Shopping service while the completion of Waymo’s year-long experiment with riders take it a step closer to launching the self-driving taxi service. Here are the details-
Investing In JD.com
Google is investing $550 million for 27.1 million newly issued Class A ordinary shares in JD.com, constituting less than 1% of the company.
The strategic investment is likely the beginning of a long-term relationship between the two, to strengthen Google Shopping on the one hand, and expanding JD.com’s global reach on the other.
The two are bringing what they do best to the table, which is Google’s market reach, analytics and technological prowess and JD’s logistics and inventory management to build retail infrastructure solutions across Southeast Asia, Europe and the U.S.
Google needs to take back some of the product search it has lost to Amazon (AMZN - Free Report) and tapping the growth potential in China and Southeast Asia also won’t hurt. JD needs to do something fast to hold its own in China and Southeast Asia as Alibaba (BABA - Free Report) has doubled down on logistics (with Cianio and Lazada). Growth in other international markets will be a bonus.
Amazon and Alibaba are giants, so it will take a lot to wrest share from them.
Carrefour, one of the leading food retailers in France has signed an agreement with Google to digitize its operations. So it is doing three things-
Adopting G Suite (including Gmail, calendar, drive, Hangouts, Docs) to be used by its more than 160,000 employees while training a thousand employees within six months in a program that started at the beginning of the year to incorporate a culture of quick decision-making;
Opening an innovation lab in Paris this summer in partnership with Google Cloud where Carrefour engineers will work alongside Google Cloud AI experts to collaborate on new consumer experiences;
And most importantly, facilitating a new buying experience from Carrefour across Google platforms (Assistant, Google Home and on the Google Shopping website in France). The companies expect that by early 2019, French shoppers will be able to shop from Carrefour with Google Home devices, with Assistant on their smartphones and through Google Shopping on the web for home delivery or pickup in-store.
So Carrefour is betting that its product knowledge and expertise in logistics and sales, when coupled with Google’s technology, will enable the company fend off competition from Amazon and other traditional retailers.
Amazon’s product breadth and global scale have shaken things for traditional retailers and food retailers are no different. So when Amazon bought Whole Foods Market last year, food retailers across the world sat up and took notice. That’s what drove companies like Walmart (WMT - Free Report) , Target (TGT - Free Report) , Kroger (KR - Free Report) and others to build relationships with Google. Now food retailers in other markets are doing likewise. One of the leading French grocers, Casino recently started selling products from its upmarket Monoprix chain on Amazon.
For Google, it’s just what the company needs to regain product search market share from Amazon (whether it will be successful in the effort is an open question).
Waymo Car in Crash
It is at times scary to see headlines about self-driving cars in crashes, but it’s also worth noting that the self-driving car is not always at fault. As it turns out, according to eye witnesses, another car jumped a red light to crash into the Waymo car, which wasn’t in autonomous mode (according to the driver). The Waymo car then crashed into three other vehicles.
400 Riders Using Waymo
Waymo selected 400 riders of varying categories and age groups (between 9 and 49) to ride its self-driving cars for free within a 100-square-mile area. In exchange, the riders were asked to provide feedback on what could be done better. After testing for a year, the feedback indicated that it needed to make certain changes on store front pickups, narrow-street pickups, waking up sleeping commuters and how to accommodate service animals.
Helping College Admissions
Google says that a Google Search to find a four-year U.S. college will now automatically pull up additional information about admissions, graduation rates, tuition costs, notable alumni, and student life. Google is also offering a feature that includes financing cost and total debt level when the student passes out.
Google is getting the information from government sources like the College Scorecard and the Integrated Postsecondary Education System.
As college education gets more and more expensive, students and their families increasingly want to evaluate just how good a college is in terms of results. This becomes difficult/confusing for many because of the amount of marketing materials available online that invariably get mixed up with actual information.
So the effectiveness of Google’s program depends on its ability to keep college ads away from pages that display information about colleges. Otherwise, we could end up with the same problem packaged differently.
Google shares carry a Zacks Rank #3 (Hold). But you can find the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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