Google will start charging for its once-free same-day delivery service and deploying it to more cities to turn Google Express into a more aggressive competitor to Amazon.com. "Many people think our main competition is Bing or Yahoo,” Google chairman Eric Schmidt said Monday in Berlin. "But, really, our biggest search competitor is Amazon."
Google Express, which facilitates deliveries of products from local retailers as varied as Costco, Staples, Barnes & Noble and Target, among others, will cost $10 a month or $95 a year for unlimited same-day or overnight delivery on orders exceeding $15. If shoppers don't want to spring for the recurring membership fee, it's $5 per order or $8 on orders of less than $15.
The operation is overseen by Google's Sameer Samat, who says: "It’s a business that at scale can be, we believe, very attractive. We have to build and invest in the ecosystem to get to that point. The density of delivery is a big element of this, having more people participating."
But it's an expensive proposition to get to there. Ken Sena, analyst at Evercore, estimates it would take some $3 billion a year to deploy the service to the 100 largest U.S. metropolitan areas. This is roughly 10 percent of Google’s predicted 2015 earnings.
Google Express is now available in Los Angeles, New York, Boston, Chicago and Washington.