Companies such as Amazon and Shopify have seen huge tailwinds to their e-commerce businesses during COVID-19.
Not so much for Google.
One top Wall Street analyst says it's something Google "needs to address" in the coming months. "I don't know if they have to acquire or develop their way back," he said.
A recent internal reshuffle along with some changes to the selling process could help Google in its efforts to claw back in shopping, but it won't be easy.
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While companies such as Amazon, Shopify, and even Facebook have seen huge tailwinds to their e-commerce businesses during the pandemic, Google continues to lag behind.
That much was made apparent when the company announced its Q2 earnings last week, revealing an 8% drop in search advertising revenue year on year – and a historic revenue decline overall.
Now, Google and analysts have a renewed focus on shopping, but they want to know: can Google catch up?
"There's clearly this spike in e-commerce activity – that's what's behind the rise of Amazon, eBay and Shopify – and at some level you wonder is Google less relevant to overall e-commerce than it used to be?" RBC analyst Mark Mahaney told Business Insider.
"I think it's something they need to address," he added.
Amazon has seen a monumental boost to online shopping during the pandemic,doubling profits to $5.2 billion in the second quarter and exceeding Wall Street expectation by a whopping 600%. Meanwhile, Shopify reported a revenue jump of 97% from a year earlier.
"When we have this pandemic-induced spike in online retail, Amazon full participates, Shopify fully participates, and then Google doesn't," said Mahaney. "So it kind of highlights that they're less relevant in e-commerce, I guess that's the clear evidence. That's something to really mull."
Google has made several recent notable changes in shopping, which analysts believe could pay off in the coming months. For example, at the end of June, it announced it would make it free for retailers to sell products in search results.
Shortly before that, the company shuffled Prabhakar Raghavan – previously SVP of ads, commerce and payments – to the top of a huge internal structure where he'll also oversee search and geo, which could help Google in its efforts to push shopping.
In fact, on an investors call last week Google CEO Sundar Pichai said there would be a "long-term focused effort on shopping with the new leadership team," alluding to the benefits of the reorg in the coming months.
But it will be a tough battle ahead, particularly going into the holiday months where Amazon will only reap more of the rewards.
"I don't know if they have to acquire or develop their way back. And it may be that they just can't," said Mahaney. "They'll always be relevant, they'll just be at the margins slightly less relevant, and they have enough properties that that's ok. That could be the answer."
He added: "If you wanted to sell on the internet, you once had to pay Google and it drove a lot of traffic your way. It's less obvious now that you have to pay Google to grow."SEE ALSO: Google's deal for Fitbit faces an EU probe — and regulators who watched the company break a major promise after buying DoubleClick in 2008
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Elon Musk became the fifth-richest person in the world on Monday, according to Forbes. His net worth is valued at over $74 billion.
The majority of Musk's wealth is tied to shares in his companies, Tesla and SpaceX.
Despite factory closures due to COVID-19, Tesla's value has increased by $200 billion since March, vaulting Musk up various indexes of the world's most wealthy individuals.
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Elon Musk's net worth skyrocketed past the $74 billion mark on Monday afternoon, making him the fifth richest person in the world, according to Forbes.
In mid-March, Musk was worth almost $25 billion and was ranked the 31st-richest person by Forbes. Since then, his net worth has nearly tripled, and he has vaulted up the list, passing Warren Buffet, Phil Knight, and Michael Bloomberg on the way.
The majority of Musk's wealth is tied to shares in his companies, Tesla and SpaceX. Tesla's value has increased by $200 billion since March, frequently hitting record highs after delivering stronger-than-expected vehicle delivery numbers.
A smaller fraction of his wealth — about $100 million — is tied up in real estate. But that's likely to change. In May, Musk announced that he planned to sell all of his worldly possessions, and listed nearly $40 million of property.
I am selling almost all physical possessions. Will own no house. — Elon Musk (@elonmusk) May 1, 2020
Like many automakers, Tesla has had a tumultuous few months as Americans increasingly stayed inside during shelter-in-place guidelines. Since March, the company's only US car factory faced shutdowns due to the coronavirus. Musk said that stopping production at the factory, based in Fremont, California, posed a "serious risk" to business, and went on to sue the local county over its shelter-in-place orders and reopen in spite of them.
Despite these hurdles, Tesla went on to deliver 90,650 vehicles to customers in Q2, topping Wall Street predictions by 20,000 vehicles.
In addition, Tesla's stock has been boosted by speculation that the company could be added to the S&P 500 after Wednesday's Q2 earnings report. Tesla also announced that it will be presenting new battery technology at a "Battery Day" in September.
Still, Tesla's meteoric stock price has perplexed analysts — and even Musk himself, who sent the stock tumbling after tweeting out that he felt it was overvalued.
Tesla stock price is too high imo — Elon Musk (@elonmusk) May 1, 2020
Tesla's car output pales in comparison to its peers like Ford, GM, and Fiat-Chrysler, yet its market cap still dominates the legacy automakers. Tesla is now worth nearly $300 billion compared to Ford's $26 billion, General Motors' $38 billion, and Fiat-Chrysler's $16 billion.
Enthusiasm from young investors and day traders have made it a popular stock. Tesla is the 8th-most traded stock on Robinhood, according to trade-tracking website Robintrack. On some days, Tesla trading can be frenzied. Last week, 40,000 Robinhood users added Tesla shares during a four hour period, according to a Bloomberg analysis of Robintrack data.
Another of Musk's ventures, SpaceX, has also enjoyed positive publicity following the launch of the Crew Dragon spacecraft, which made Bob Behnken and Doug Hurley the first NASA astronauts to fly on a commercial rocket to the International Space Station. The space technology company is worth nearly $36 billion, according to Pitchbook data.
Despite recent gains, Musk's wealth is still dwarfed by four men: Jeff Bezos, Bernald Arnault of LVMH, Bill Gates, and Mark Zuckerberg.
Yet, Tesla's fortunes, as well as Musk's, may change soon. Its second-quarter earnings report is scheduled for Wednesday after the market close. The earnings could propel the stock — and Musk's net worth — even higher, or reverse the big gains from recent weeks.SEE ALSO: The future of Tesla's $200 billion winning streak hinges on this week's earnings report
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