Google Plans to `Get Better' at E-Commerce, Vice President Tilenius Says

Google Inc. “wants to get better” at e-commerce by creating tools that help local companies sell products via mobile devices, said Stephanie Tilenius, the company’s vice president of e-commerce.

“We’re doing everything we can to integrate commerce and mobile and local,” Tilenius, a former senior vice president at EBay Inc., said during her first interview since being hired in February. “We have all the data to do that.”

In the past six months, Google began offering product reviews and introduced a mobile-shopping application that shows merchandise in nearby Best Buy Co., Sears Holdings Corp. and Williams-Sonoma Inc. stores. It also started virtual storefronts for small companies to market products. Google tapped Tilenius to find ways to bolster revenue as growth slows in its main business of selling ads next to search results.

“There’s a recognition with hiring me that Google wants to get better at commerce,” Tilenius said during a speech yesterday at ChannelAdvisor’s Catalyst conference in North Carolina. “It’s a greenfield opportunity for me. I’m coming in and saying where we should be innovating.”

Tilenius said she’s looking at ways to integrate Google Checkout, which competes with EBay’s PayPal, more closely with other services. The company is also seeking to bring down the $50,000 price for retailers to incorporate a Google search box within their own websites, she said in the speech. These initiatives are aimed at helping consumers find which products they want and where to buy them, she said.

E-commerce companies grew during the recession and will gain share against traditional retailers, according to Forrester Research Inc. in Cambridge, Massachusetts. Total U.S. online sales may climb 11 percent this year to $172.9 billion, and 11 percent in 2011, according to Forrester estimates.

Happy Consumers, Retailers

“Google realizes that they could do a better job analyzing people’s intent and providing them better user experiences,” Tilenius said in the interview before her speech. “If we do a better job of targeting, then the consumer’s happier and the retailer’s happier because the consumer spends more money.”

She declined to detail any e-commerce plans, saying the company would unveil its strategy in the next 12 months. Google created Tilenius’s position when she joined the company. During her nine years at EBay, she persuaded chain retailers to adopt PayPal, fueling the payment processor’s growth.

As Google bolsters its e-commerce presence, it’s likely to become a bigger rival to online-retailing pioneers Amazon.com Inc. and EBay. For the first time in its annual filing, Google named the two companies as competitors this year.

‘Retain the Shopper’

“It’s becoming much easier for consumers to find and evaluate competitive product offers from multiple sellers without ever leaving Google.com,” said Eric Best, chief executive officer of Mercent Corp., a Seattle-based online- marketing firm. “Ultimately, it’s in Google’s interest to retain that shopper and provide a complete shopping experience. That has implications for Amazon and EBay.”

Google climbed $6.13 to $512.50 at 1:59 p.m. New York time in Nasdaq Stock Market trading. The shares had slid 18 percent this year before today. That compared with Amazon.com’s 3.5 percent decline and the 1.9 percent drop for EBay.

Google isn’t planning to set up a marketplace, similar to those at EBay and Amazon, where merchants can sell products, Tilenius said. “We’re trying to step back and figure out where the pain points are for consumers,” she said.

Small businesses that make a living from online sales are eager for Google to change its tune, according to Scot Wingo, CEO of ChannelAdvisor, which helps merchants sell on the Web.

“We wish they would open a marketplace,” Wingo said. “There are a lot of people who would love to sell directly on Google.”

To contact the reporters on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

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