Google and Amazon Square Off, Ignoring Customers in the Middle

A long-simmering dispute between Google and Amazon this week escalated into a front-burner feud, following Google's decision to block its YouTube video service from Amazon's Echo Show, effective immediately, and from its Fire TV, effective Jan. 1.

Google apparently decided to cut off YouTube as retaliation for Amazon's refusal to carry its products, including Chromecast and Google Home, on its website. Further, Amazon has not made its Prime Video service available to Google Cast users. Amazon also recently stopped selling some smart home products from Nest, another subsidiary of Google parent Alphabet.

Echo Wars

The tiff marks the latest in an evolving series of disputes related to ecosystem building. Companies with their own hardware and content ecosystems constantly must choose between interoperability and competition, suggested Tim Mulligan, senior analyst at Midia Research.

"Hardware/ecosystem proxy wars are an inevitable consequence of an integrated tech and media company looking to replicate Apple's success with building a closed ecosystem around their devices," he told TechNewsWorld.

Amazon and Google have competing video ecosystems and voice-activated devices, so each must take steps to protect its respective business interests.

Google may wind up being the party that takes the biggest hit, as keeping YouTube off the Amazon Echo Show could hit it directly in the wallet.

"This is one of those instances where Google's young executive staff showcases as a serious problem," said Rob Enderle, principal analyst at the Enderle Group.

"What they are doing is stupid," he told TechNewsWorld.

YouTube depends on advertising revenue to make a profit, Enderle pointed out, and cutting off access is going to hurt Google more than Amazon.

More Than It Can Chew?

On the other hand, it could be Amazon's ambitions that have kept it from reaching a deal with Google, observed Charles King, principal analyst at Pund-IT.

"The problem apparently began with a disagreement over Amazon's implementation of YouTube on its Echo Show devices but has escalated from there, with Google restricting access to its content and Amazon pulling Google products from its site," he told TechNewsWorld.

"You could call it a commonplace pissing match between online behemoths, but if so, it's one where the company's' customers are the ones who are most likely to get splashed, King quipped.

The conflict could escalate further if Net neutrality is voted out at the next meeting of the FCC, Tirias Research Principal Analyst Paul Teich told TechNewsWorld. "That might be a way for the competitors to charge customers obscene amounts of money to have the convenience of cross-platform access."