Who Wins the (Online) Corner Store?

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Today I want to talk about one of the fascinating tussles in technology: trying to turn the shop around the corner into an online store.

Just about every business, from Walmart to a home baking operation, wants to find customers and sell its products online, and this has only accelerated during the pandemic. But it’s hard. An owner of a cheese shop doesn’t have the time, expertise and money to become as skilled in online shopping as Amazon.

What’s happening spotlights a big question about the future of commerce: Will one-stop specialists like Amazon dominate everything, or will the internet empower anyone to open a successful store?

To over simplify, there are essentially two paths for businesses that want to sell stuff online or just have an internet presence. They can either do it themselves, or link up with an online powerhouse. Both come with downsides.

That cheese shop or a local toy store can set up its own website, but then it has to hope that it gets noticed. It can also be annoying to manage a website and maybe handle online orders, too.

Or the cheese shop can sell online at a food bazaar like Goldbelly and the toy store can sell merchandise through Amazon — where lots of potential customers already are — and have those websites catalog inventory and handle payments and shipping. The downside is that the merchants typically give up a big chunk of sales, control and customer loyalty to those websites.

Enter one zillion tech companies that promise to help. Facebook and its Instagram and WhatsApp apps pitch themselves as a way for stores or home businesses to easily go digital and reach a massive audience without losing independence. Google, Square, Reliance Jio in India and WeChat in China hold out a similar premise.

To varying degrees, these companies all try to bridge the do-it-yourself approach for online businesses with the benefits of linking up with vast internet malls like Amazon.

Maybe the most interesting one of them all is Shopify. Without most people noticing, its software powers the online storefronts of about 1.7 million businesses, and it has grown by leaps and bounds during the pandemic.

For a monthly fee and a relatively small commission on sales, businesses can use Shopify to set up a website and app, display images of their products, connect to their inventory systems and handle online payments.

Unlike many of the other tech companies that want to bring stores online, Shopify promises to give businesses a way to reach shoppers everywhere, including on Facebook, Walmart.com and their own websites. Businesses can also ship products from a Shopify network of warehouses, like what Amazon offers merchants.

You can see the promise. Just as Uber wants to put the delivery power of Amazon in the hands of local businesses, Shopify wants to give stores the digital skills of Amazon without losing their individuality or spending a fortune by selling on Amazon or another online bazaar.

Is this going to work? We’ll see. News emerged this week that Amazon bought a Shopify-like company, which could be a sign that Amazon thinks Shopify is onto something.

I wonder if there really is a middle ground like the one Shopify is seeking to offer — and not just in shopping. Services like Patreon and Substack promise musicians and writers an easy path to reach the world without becoming a faceless cog in internet machines like YouTube.

But the history of the internet is that success accrues most to companies that assemble vast numbers of people and make it easy for all of us. And that’s Amazon.

Explaining Australia’s Facebook news blackout

Something strange is happening in Australia. There’s a proposed new law there that would require big internet properties — basically, Google and Facebook — to directly pay news organizations for linking to their news.

In response, as my colleagues reported, Google cut a deal to pay Rupert Murdoch’s News Corp, one of Australia’s dominant news organizations. Facebook said it wouldn’t go along, and on Wednesday started blocking any links to news articles. (And a lot of not-news, too, including government information.)

Here are a few thoughts:

The opposite of an underdog: Google and Facebook are the ultimate big dogs, and everyone else — even Murdoch and the rest of Australia’s concentrated news media industry that pushed for this law — is an underdog by comparison, my colleague Damien Cave, based in Sydney, wrote.

Like their counterparts in many other countries, Australian media companies have complained for years that they weren’t being fairly compensated for the value their information provides to internet giants. But Australia is (so far) one of the few countries where the news media had the power and connections to make it happen.

Facebook and Google aren’t in lock step: Google sees news as essential to people who are hunting for information on its sites. Facebook sees itself as a hub for people to come together — and news articles are a relatively small part of the global conversation.

But it’s not just philosophy at work. Google may be betting that it’s cheaper and wiser to pay up in Australia — and maybe elsewhere — and avoid sparring with news outlets and the government. Facebook seems willing to fight. (It’s also possible that Facebook will reach a compromise, and news will return.)

An experiment in news without Facebook: Australia is an unwitting test lab for what happens to Facebook, news organizations and the public when Facebook is a news desert.

After Google News shut down in Spain a few years ago over a legal dispute, online readership fell for news organizations, although it may not have been a bad thing.

But these are meaty questions with no easy answers: Are Facebook and Google good for news organizations, or are they parasites? Do they have an obligation to support quality news? And are people better informed from reading news on Facebook, or is it such a mix of good and garbage that no one loses if the news is gone?