Shopping on Google? Only Advertised Items to Appear

Google Product Search will soon become Google Shopping, and the new name will be accompanied by a big, and potentially irksome, change to the service. In a nutshell, companies will now have to pay for their position in search results. "We are starting to transition Google Product Search in the US to a purely commercial model," a VP tells Reuters. "This will give merchants greater control over where their products appear on Google Shopping." Up until now, the service had been free—and the shift is "a very big deal," says an e-commerce insider.

Product Search currently leads to an estimated $650 million in annual sales, so companies have a lot at stake: "That's the free sales that are going to disappear unless they decide to pay," says another online sales expert. "The winner in this is Google." To see that level of sales, one expert predicts merchants will have to spend $270 million a year on advertising. But Google defends the plan: "Having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date," the VP blogs. "Higher quality data ... should mean better shopping results for users, which in turn should create higher quality traffic for merchants." The change will go live by October. (More Google stories.)