I think what Google wants to do is fully integrate product listings with their search results -- which, they already do in some limited capacity. The best way to do a really good job of it is to have the sale of those items integrated entirely in to Google's "platform." All the other pieces, such as Google Checkout, are already in place and mature.

If Google ships, they know an item was sold and who bought it. They know everything. Their listings can be on a CPA basis rather than CPC for the advertisers (merchants.) The cost for shipping probably could be absorbed by the merchant in much the same way that merchants pay for advertising in the first place.

In the short term, it probably doesn't make much sense. In the long term, Google is probably more interested in cutting out the retail middle man then they are competing with Amazon.

Maybe all these companies have no other choice but to compete. If they had they would have found some way to prevent too much competition.

But the core of amazon, google and facebook is: gather all the consumers and their data , and market or sell them stuff.

And the other half of the business is: build marketplaces for vendors , be it books, physical products , ads , etc.But that's relatively easy[1], once you have the consumer side.

[1]for digital products, it's easy: if you have buyers, sellers will flock to your door and infrastructure is relatively easy.

For physical products you can build your own(amazon), you can partner with providers(current google effort) and you can partner with logistics provider(ebay). So even for physical products , it's not that difficult.

One thing that Amazon does is shove a load of adverts, i.e. leaflets, into their parcels. Given that Google is also a behemoth in the ad industry, this might just make sense.

My family has never had ANY leaflets in our parcels, and we've been ordering off amazon for years now.

I've been a Prime member for 3-5 years, I guess, and we've gotten dozens and dozens of them through the years. I can say that I cannot actually remember the last time I received one. I can, however, remember that it was a "Cell phones for servicemen" or something like that.

My most recent order from Amazon UK had three leaflets: a voucher for Naked Wines, a voucher for Ocada and something else that I can't remember. Most orders I get from Amazon have at least one leaflet, it's the same for other online retailers, such as Play.com.

Like all leaflets I just put them in the recycling. Never looked at them.