This makes perfect sense. The internet is becoming a social marketplace. With Amazon selling a tablet preloaded with their website, you don’t need to go anywhere else to buy things. That’s going to hurt Google’s Ad Words. Most websites buy advertising on Google to get their site to the top of the pagerank. Without Ad revenue, Google search is bust. Granted they’ll still make a lot of money off of their mobile operating system and other ventures but at the core, Google is still about search.
What Googlers worry about in private is a growing trend among consumers to skip Google altogether, and to just go ahead and search for the product they would like to buy on Amazon.com, or, on mobile in an Amazon app.