Google re-establishes e-commerce toehold

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Google's Galaxy Nexus
Google's Galaxy Nexus

In March, Google rebranded Android Market, its app store launched in 2008, to Google Play. In addition to apps, Google Play, like Apple's iTunes, now sells other digital entertainment such as music, books and films.

And now, Google Play has taken on elements of the Apple Store. On April 24, Google began selling its new Galaxy Nexus smartphone directly to consumers, according to the New York Times. The phone, which costs $399, is manufactured by Samsung and of course runs on Google's Android operating system.

It's interesting to see the Google's progression into e-commerce. According to the Times article, Google had previously tried to sell its Nexus One smartphone, manufactured by device-maker HTC, through its online store in January 2010. However, the company called off its efforts less than six months later because of poor sales and because—except for T-Mobile—carriers refused to sell the phone in their stores. Moreover, Google miscalculated by offering customer support only through online channels.

But while Google's Nexus One device might have flopped, its mobile operating system Android didn't. Android became the number one smartphone in the US in terms of consumer marketshare in March 2011, according to a Nielsen study.

As of February this year, Android held 50.1% of the marketshare of smartphone subscribers, according to a comScore study released in April.  

But with all of Google's success selling its operating system to device manufacturers, why is Google re-visiting an old failure by selling the device itself? Because Google Play is the company's attempt to sell direct-to-consumer. So from Google's standpoint, if they're going to sell you, the consumer, media and content, why not also try to re-establish that old e-commerce toe-hold by selling devices powered by Google's software?

Do you think this second time will the successful run for Google, or will they have to wait until the third try?

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