Google Buys Smarter Commerce as Amazon Derives Its Own Currency

Online shopping has become par for the course, something we take for granted.  But as e-commerce standardizes around todays technology, the trend shifts towards smarter interactions and digitized alternatives to cash.  That’s a huge business opportunity for a sector eMarketer expects to hit $1.3 trillion this year.  According to eMarketer’s latest global estimates, the business-to-consumer e-commerce market grew by 21.1 percent, or $1 trillion, last year, and that number will increase by 18.3 percent to $1.298 trillion worldwide this year as more people shift spending from physical shops to online retail stores.

B2C e-commerce sales in the US will grow 12 percent to $384.80 billion this year after growing 13.8 percent to $343.43 billion in 2012.  The US will remain the single country with the largest share of worldwide B2C e-commerce spending, at 29.6 percent in 2013, but Asia Pacific, specifically China, India and Indonesia, show rapid growth in online shopping.

We expect a plethora of consumer-driven services to emerge as a result of shifting spending patterns, and that means we’ll need smarter apps and more diversity for currency and goods.  Let’s take a look at the industry’s latest developments:

Google acquires Channel Intelligence

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Google continues to expand its reach in e-commerce with the announcement of its acquisition of Channel Intelligence, a service that makes it easier for people to find and purchase products online.

CI has worked with Google for years, partnering with Google Shopping and specifically on its Return On Ad Spend (ROAS) with Product Listing Ads (PLAs) products.  CI is working with 850 retailers in 31 countries.

“All CI services will continue to offer the excellent client service and great performance that our clients have come to expect over the years,” CI announced on its site.

Terms of the deal were not disclosed.

Amazon Coins

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Amazon announced that in May, a new virtual currency will be available in the Amazon Appstore for Android on Kindle Fire.  The new virtual currency is dubbed Amazon Coin, and Kindle Fire users will be able to redeem the new currency to purchase apps, games, and in-app items on their Kindle Fire.

Amazon Coins aims to enforce loyalty in its Kindle Fire user base, since the virtual currency cannot be used for other services on other devices.  The e-comm giant will be giving away tens of millions of free Amazon Coins when it launches in May to help Kindle Users get started, learning the benefits of having a dedicated virtual currency.  Amazon also claims that it will be a boon for developers too, since they will earn their standard 70 percent revenue share when customers make purchases using Amazon Coins.

“Developers continue to report higher conversion rates on Amazon compared to other platforms,” said Paul Ryder, Vice President of Apps and Games for Amazon. “Now we have another new way to help developers reach even more of our millions of customers. Amazon Coins gives customers an easy way to spend money on developers’ apps on Kindle Fire in the Amazon Appstore—and we’re giving customers tens of millions of dollars in Amazon Coins to get started. Developers who aren’t yet in the Amazon Appstore will want to make sure their apps have been submitted and approved by April 25 so they’re ready for customers to start spending their Amazon Coins.”

Some are still skeptical about the new virtual currency, since others have seen little uptake in this area, such as Facebook Credits, Microsoft Points, and Flooz.  And others see virtual currencies as a nuisance in its limitations.

Our founding editor Mark “Rizzn” Hopkins is one of the skeptics regarding Amazon Coin, particularly as there’s been a long string of fails in this department.  He provides his full analysis on the topic during a full-fledged e-Commerce discussion on this morning’s NewsDesk show with Kristin Feledy:

Used digital goods?

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In other Amazon news, the company has been awarded with a patent regarding the sale of second-hand or previously owned digital content such as music, e-books, movies, and apps.

Amazon originally filed the patent in 2009 and was awarded last January 29, 2013.  The patent also prevents piracy of digital content, as well as copyright infringement, as it aims to maintain scarcity of digital content by setting an object move threshold limit.

“[A] popular used digital object such as a song may have an OMT of three, only allowing three permissible moves of the song to other personalized data stores. After the OMT is reached, the used digital object is no longer permissibly moveable to another personalized data store…,” Amazon’s patent stated.

Amazon’s patent could greatly affect other businesses that offer the same thing such as ReDigi, a free cloud service that allows you to store, stream, buy, and sell your legally purchased pre-owned digital music.  ReDigi has already been sued by EMI for copyright infringement.

About Mellisa Tolentino

Mellisa is a staff writer for SiliconAngle, covering social and mobile news. She is fascinated by technology and loves imparting what she learns through her journey as a writer. Got a news story or tip? Send it to mellisa@siliconangle.com