Google is the undisputed king of search in all but one lucrative and vital category: Product searches.

Over the past decade, Amazon has transformed itself from a seller of books online to the place Americans turn to when they want to search and buy just about anything — from diapers to flat-screen TVs. In some cities, Amazon has started delivering fresh groceries. With each product search that starts on Amazon instead of Google, the search giant’s main business of selling ads alongside search results weakens.

Though Google over the years had experimented with letting consumers buy goods with the help of services such as Google Wallet and Google Checkout, it accelerated this strategy in 2013 with Shopping Express. The service lets shoppers buy things from local retail stores through Google, which then delivers them to consumers from the physical retail store on the same or next day.

A source familiar with the company’s plans says senior Google execs have set aside as much as $500 million to expand the service nationwide. Google declined to comment on the size of the investment but made no secret of its ambition.

“You can very much expect that we are putting a lot of money into this and we’re excited and willing to sustain that investment over time as this gets going,” said Tom Fallows, head of Google Shopping Express.

Investment so far has gone toward the marketing of the service in each new city and the buildup of a fleet of delivery vehicles, as well as toward paying for a network of couriers and workers to pack up the goods in stores and deliver packages to shoppers’ doorsteps.

The service gives Google a crack at the $600 billion grocery market. Also at stake is a large piece of the $3.5 billion in so-called direct-response digital ads that research firm eMarketer expects consumer package goods companies and electronics brands to spend in the U.S. in 2014. This category of ads, which includes search ads, is meant to influence online shoppers to perform specific tasks, such as signing up for email newsletters or making an online purchase.

“Google can’t give up on product search and this is another pathway to closing the loop for advertisers,” said Keith Anderson, a vice president at the consulting firm RetailNet Group. “They failed on the payments side in stores, but if they can use expedited delivery as a way to get it then they’ll keep on being willing to spend.”

Google, Ally

Google’s Fallows said a major goal of the initiative is to add more utility to product search advertisements on Google.com. On Amazon, you search for a product and can buy it immediately. On Google, that hasn’t been the case.

“We have been displaying to shoppers information about locally available listings for five years,” he said. “And throughout that time shoppers had really interesting feedback: ‘Thanks, Google, but now you’re not helping me do anything about getting that product today.’”

Google is now trying to provide that help. “We think that helping close the loop on locally available items is a really important part of making sure Google is the best place to shop,” Fallows said. Eventually, Google may include some type of notification on product search ads letting shoppers know that a given product is available for same-day delivery, Fallows said.

Unlike Amazon, Google does not operate its own giant warehouses or store inventory for more than a few hours. Instead, it fulfills customer orders by picking up items from nearby retail stores. So rather than compete directly against retailers like Amazon does, Google is attempting to position itself as an ally.

Shoppers in cities where the service is available — mainly areas around San Francisco, Los Angeles and New York City for now — visit a dedicated Google Shopping Express website where they can choose to buy goods like groceries, cameras and clothing from a selection of retail partners.

Partners include big names such as Target, Costco, Toys “R” Us and Whole Foods. Once an order is placed, Google sends a contracted courier to pick up the goods from a partner store, where either a Google employee or a retailer’s employee has grabbed the merchandise off a shelf.

The order is then whisked to a warehouse operated by Google where multiple orders are packed into a vehicle, and sent out the same day. In some instances, Google packs orders and hands them off to shipping partners for delivery the following day.

Google takes a cut of each transaction, usually in the single-digit percentages, according to a person familiar with the deals. Fallows called that commission “the core of the business model.” Google also charges shoppers a $4.99 fee for each store a courier has to visit to complete an order.

But when the service launched in New York recently, Google waived the delivery fee and said the service would be free for the first six months.

Eventually, Google plans to launch a flat-fee membership model similar to Amazon Prime, Fallows said.

Amazon Prime costs $99 a year and includes two-day shipping on a wide array of products as well as access to a large library of videos and music that can be streamed via the Web for no additional cost. Its Prime Fresh membership, which is only available in parts of California and includes grocery food and other products available for same-day or next-day delivery, costs $299.

Fallows said Google has not decided on a price for the Google Shopping Express subscription, but it wouldn’t be surprising if it was under $100 annually.

“We intend this to be an affordable service that as many people as possible can adopt,” he said. “We are trying to democratize the world of same-day delivery.”

But, under the current model, Google can’t do it alone. It needs to strike partnerships with retail companies willing to let Google control the online shopping experience, own the customer data and build relationships with a retailer’s or grocer’s own customers.

For the most part, Google Shopping Express only provides retailers with aggregated customer data on who is buying what from their stores. Retailers and grocers generally only get information on individual purchases if they operate under membership models (such as Costco) or if a customer uses a loyalty card with their Shopping Express purchase. Four retail executives Re/code contacted said they trust Google as a partner and do not have a problem with this arrangement. It’s not clear, though, how long retailers will allow Google so much control.

A person familiar with the Shopping Express business told Re/code that certain partners have pushed Google to integrate Shopping Express as a delivery option on their own e-commerce websites. That type of partnership would allow a retailer to feel like it is maintaining a direct relationship with its shoppers while relegating Google to more of a vendor role.

“Our retailers are very interested in how we can extend that service across the full multi-channel engagement that retailers and shoppers have,” Fallows said, without directly confirming plans for such an integration. “And across all different destinations.”

Proceeding With Caution

In the meantime, retailers who have signed on to work with Google are taking a cautious approach to their partnership. Many are allowing only a handful of their stores to take part in the program as they assess the risks and rewards of the arrangement. Google, after all, is one of the most powerful tech companies on the planet, while retail companies aren’t traditionally known for their technology prowess. For some retailers, that gap in technological know-how is all the more reason to partner up with a company like Google. Others fear being taken advantage of by Google.

Big retailers, however, are clearly taking these partnerships seriously. Instead of sending mid-level business development executives to strike deals with Google, some are negotiating at the top. Costco’s CEO, for instance, flew out to Google’s Mountain View, Calif., campus to meet with Google CEO Larry Page before agreeing to participate in the Google Shopping Express program. Costco CFO Richard Galanti also met with execs at Google on a separate trip. Galanti said it’s important for Costco to consider new sales channels as more shoppers make purchases online.

“We’re pretty good at knowing what we know how to do and what we don’t,” Galanti said. “We’re not arrogant about it.”

What’s keeping some retail bosses awake at night, however, is the ongoing suspicion that Google could eventually build an Amazon-like marketplace in which the search giant sells products directly to shoppers and cuts out brick-and-mortar retailers altogether. Even some current Google Shopping Express partners see the potential for such an approach.

“Why wouldn’t Google just eliminate the merchant from the middle?” said Faisal Masud, e-commerce chief at Staples.

Fallows, for his part, was adamant that Google will not pursue this strategy.

“Very firmly no,” he said. “Google is a platform and partnership business. We can’t say that strongly enough.”

Another fear among some retailers, according to RetailNet Group’s Anderson, is that as long as the purchases keep running through Google instead of the retailer’s site, Google will start to collect more and more valuable information on who buys what. Google could then use that data to attract more money from brands looking to promote their own product through Shopping Express no matter which retail store it comes from. Some of that marketing money, Anderson believes, could in turn be shifted away from funds these brands typically allocate to retail stores to promote individual products.

“Google may be in a position to go to Procter & Gamble and say, ‘Why would you give [marketing] dollars to Target when you can just give them to us and we’ll promote the brand whether the shopper decided to buy from Target or another retailer?’” Anderson said.

Despite these concerns, Google has assembled a respectable group of partners to the program. Several of them say participating in the Google Shopping Express program gives them a way to evaluate whether it’s more cost effective to offer same-day and next-day delivery themselves, through a partner or whether they should at all.

Google is not alone in its approach to helping retailers fend off Amazon. EBay’s eBay Now service also uses couriers to deliver goods from retail stores to customer doors. The company recently confirmed that it was scaling back its near-term ambitions for the program after originally saying it would expand from three to 25 U.S. cities by the end of 2014. It did not explain why.

Instacart, a fast-growing startup with funding from Andreessen Horowitz and Sequoia Capital, does something similar but focuses on groceries. Instacart hires personal shoppers to go pick up the items from local stores and take them directly to customers’ homes.

Still, the biggest threat to all of these businesses remains Amazon. With sophisticated nationwide logistics infrastructure and a relentless drive to grab market share, Amazon’s same-day and next-day delivery expertise will be hard to rival.

But if you’re Google, there’s little choice when part of your core business is at risk.

“Once we’re really ready, we can really bring Google’s full energy and force to bear to expand this very quickly,” Fallows said.