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The War Between Alphabet Inc and Amazon.com, Inc. Is More Brutal Now

Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google and Amazon.com, Inc. (NASDAQ:AMZN) are escalating their fight, and consumers are caught in the middle. After restoring YouTube access on Amazon’s Echo Show in November, yesterday Google once again blocked it.

The War Between Alphabet Inc and Amazon.com, Inc. Is More Brutal Now

Source: Amazon

The company also upped the ante, and took the conflict with AMZN to a new level. Google blocks YouTube access on Amazon’s Fire TV video streamers starting on Jan. 1, as well.

What the heck is going on here?

The answer ultimately boils down to two huge technology companies that are competing with each other in some areas, yet each needs the other in key ways. They are using the immense power their respective positions give them to lash out at each other, and consumers are the ones taking the brunt of it.

Amazon Stops Selling Nest Products, Google Blocks YouTube

The opening shots of this battle took place in September. Google blocked YouTube on Amazon’s Echo Show smart speaker, claiming Amazon was using a non-standard interface to display the online video service. Amazon redesigned it, and in November Google restored the service.

But yesterday, things got ugly. After Amazon stopped selling some Nest products, Google once again yanked YouTube access from the Amazon Echo Show. And, it announced Amazon’s Fire TV video streamers will lose YouTube access on Jan. 1.

Gizmodo — which described the two companies as “acting like a couple of teenagers” — reached out to Google about the current escalation and received this response:

“We’ve been trying to reach agreement with Amazon to give consumers access to each other’s products and services. But Amazon doesn’t carry Google products like Chromecast and Google Home, doesn’t make Prime Video available for Google Cast users, and last month stopped selling some of Nest’s latest products. Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and FireTV. We hope we can reach an agreement to resolve these issues soon.”

An Amazon representative told The Verge:

“Google is setting a disappointing precedent by selectively blocking customer access to an open website.”

This Is Getting Ugly and Consumers Lose

The Google versus Amazon fight is hitting the point where it has real repercussions for both companies.

Amazon is trying to hold onto its massive lead in smart speakers, and fighting for market share against rivals like Apple Inc. (NASDAQ:AAPL) and Roku Inc (NASDAQ:ROKU) in the video streamer market. It’s also trying to grow Amazon Prime Video. When Google blocks YouTube — the web’s most popular video streaming service — from the Amazon Echo Show and Fire TV, it hobbles those products. It angers current owners and it’s likely to cut down on sales of the Echo Show and Fire TV during the all important holiday shopping season.

Especially since, to rub salt in the wound, launching the YouTube app on Fire TV now displays a warning of pending loss of service, and displays a link to competing devices that consumers can use instead!

Alphabet is doubling down on its expansion into hardware, with Google’s smartphones, Chromebook, smart speakers, streamers and Wi-Fi routers, and a growing line of smart home products from Nest. But when the largest online retailer in the U.S. decides to stop selling those products, that significantly handicaps Google’s efforts to get them to consumers. And, while Google is blocking YouTube on some Amazon devices, Amazon has also refused to support Amazon Prime video for Google’s Chromecast, which limits that streamer’s appeal.

Besides the potential financial impact on both Google and Amazon, this spat is not winning either company any fans. And with consumers caught in the middle, it risks drawing the attention of regulators if it continues.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2017/12/war-between-alphabet-inc-amazon-com-inc-is-brutal/.

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