What the Google and Nest reunion means for Amazon

Gadgets


The Google Home, left, and Amazon Echo Plus.


Tyler Lizenby/CNET

Google said Wednesday it plans to reunite with gadget maker Nest, creating a potentially formidable combination in smart-home tech.

The rejoining of the two businesses, which are both owned by parent company Alphabet, should bring the Google Assistant digital helper into more devices and help it compete against Alexa, Amazon’s rival voice assistant. But, this new situation may put Amazon — which integrated Alexa into Nest products and sells Nest devices on its site — in a tougher spot.


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Tensions have already flared over the past few months between Amazon and Google. In December, Google said it would remove YouTube from Amazon’s Echo Show and Fire TV device in retaliation for Amazon banning Google Chromecast gadgets on Amazon.com two years ago. In hopes of mending fences, Amazon soon after brought back Chromecast devices on its site.

The two also competed for attention at the CES tech show in January, with both trumpeting new partnerships for their rival voice assistants.

Amazon didn’t respond to a request for comment for this story.

With all that in mind, let’s run through some of the potential scenarios facing Amazon following the Google-Nest team-up.

A worst-case scenario: Google could use its closer relationship with Nest to boot Amazon’s Alexa off Nest products. That could give a boost to its own Google Assistant, which is playing catch-up to Alexa.

This situation would undoubtedly hurt Amazon, with the company losing Nest as a major smart-home partner. But, more importantly, it would also create a big headache for customers who’ve bought both Alexa and Nest products.

Google is unlikely to go down this path, primarily because it would upset Google’s customers. Such an aggressive move could also incite Amazon to counterattack, or perhaps invite the scrutiny of US regulators. Long term, it could also have a chilling effect on future Google gadget sales, since customers wouldn’t want to be stuck in a similar situation down the road.

A best-case scenario: With Google and Nest unified, Amazon could have fewer people to deal with at both Alphabet units, streamlining negotiations. It this scenario, Amazon and Google could forge a better relationship, so more Google products end up on Amazon.com and Amazon’s Alexa works with more Google electronics.

Since everyone’s being so friendly, Google would also bring back YouTube to the Amazon Echo Show and Fire TV devices.

For the sake of customers, we can hope this kind of nicer relationship will come about, but stiff competition between the two companies should ensure further tensions.

A more-likely scenario: Right now, Amazon and Google are increasingly competing in voice computing, e-commerce and online advertising but also need each other in those areas and others.

Today, Google sells its Wi-Fi router system, Pixel phone and even Google Play gift cards through Amazon, the world’s largest online retailer. Meanwhile, Amazon often needs to lean on Google.com, the world’s biggest search engine, to bring traffic to its online store, and offers its e-commerce app on phones using Google’s Android operating system.

This doesn’t suggest these two tech titans are about to become best friends — just that they are prevented from scorched earth maneuvers, because they rely on each other in multiple ways.

For now, both companies appear ready to play nice, since that’s the direction they are moving in following Amazon’s decision to bring back Chromecasts. Beyond that, they are likely to maintain a status quo of not-too-friendly, not-too-mean relations.

Another flare-up between them seems inevitable. But even then, a future tussle would likely be limited, since these companies need to keep finding ways to work with each other.

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