Google has made an interesting new acquisition that suggests it may be attacking Amazon's shipping business.
It just bought BufferBox Inc, a Y Combinator startup, for an undisclosed sum. BufferBox is a kiosk that can be placed in local venues around the nation for self-service parcel pick-up. In other words, if BufferBox becomes popular, you could walk into your local CVS and pick up a package you ordered from an online merchant.
This is a product -- not a talent -- acquisition. BufferBox will continue operating within Google.
"We're going to keep doing BufferBox," Google engineering director Steve Woods told Financial Post. "We’re not going to go into great detail about our future plans, but we think there’s a real exciting space beyond this amazing start with boxes, and the idea of touching consumers as part of their end-to-end experience is something we’re going to explore together. I don’t think we would say even definitively what it’s going to be, but we’re going to do some great things together.”
BufferBox had plans to undercut even the cheapest shipping services and deliver packages to its kiosks for $3 or $4. (USPS costs about $5.25 per package. UPS and FedEx cost more.) It also planned to set up 100 kiosks around the Toronto area in 2013.
So, what does Google want with a shipping company?
The Economist has one idea.
"Google is experimenting with a service that would let folk find goods online, order them and have them delivered within a day for a modest fee," The Economist wrote this morning. "This seems similar to Amazon’s hugely successful 'Prime' service, which costs $79 a year to join in America. Rather than try to replicate the e-commerce giant’s extensive network of warehouses, Google is looking for partnerships with shipping companies and retailers instead. But if it is serious about taking on Amazon, it may ultimately have to buy a logistics firm. At $69 billion UPS has a market value less than a third of Google’s; it is valued at less than twice the search giant’s cash pile."
The Economist implies that Google could jump whole hog into fulfillment and logistics, and that it could becoming the back-end ecommerce delivery system for the world.
Of course, that is an entirely different business than the business Google is in right now. And it's not clear why Google would want to be in that business, especially with so many other promising opportunities to invest in.
So, what do you think Google wants with a startup like BufferBox? Is this really the beginning of a full-on shipping war between Google and Amazon?
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