business news in context, analysis with attitude

The New York Times reports that Google has revealed that for the past two years it has be testing an experimental drone program, dubbed "Project Wing," that would develop products via the small unmanned aircraft. Dozens of people are working on the project, which is now focused on improving the technology and developing a mobile app that will access it.

The program is similar to one being invested in by Amazon.

And, speaking of Amazon…

The Wall Street Journal reports that Amazon may test a new ad placement program later this year, designed to challenge Google's $50 billion-a-year ad business.

According to the story, the program - at least tentatively called "Amazon Sponsored Links" - is seen as making it easier "for marketers to reach its nearly 250 million active users."

The Journal writes that "people familiar with the matter said Amazon's offering would resemble Google's AdWords, the engine that Google uses to place keyword-targeted ads alongside Google search results and on more than two million other websites. AdWords is the foundation of Google's roughly $50 billion-a-year advertising business, and Google counts Amazon as one of its biggest buyers of text link ads … Amazon now displays several types of ads on its pages, including text-based keyword ads placed by Google and other third parties, as well as product ads that Amazon places itself … To displace the Google ads on its site, Amazon is building a tool to help advertising agencies buy in bulk for potentially thousands of advertisers, the people familiar with the matter said. Building such a system could enable Amazon to boost its business placing ads on third-party websites. Google offers similar capability for advertisers using AdWords."
KC's View:
These days, Amazon is fighting a lot of battles on a lot of fronts. Since Google has decided to go after it with its own e-commerce business, using Google Shopping Express to allow traditional bricks-and-mortar retailers to compete more effectively with Amazon, it makes sense that Amazon would look to go after Google in one of its core businesses.

The question, I think, is how much collateral damage there will be to traditional retailers caught in the cross-fire.