AI’s danger to Google is advertising revenue, not search dominance

Google’s reign as the most visited website has been uncontested since the early 2000s, when it rose to popularity as the top search engine. With the advent of new artificial intelligence (AI) chatbots like ChatGPT, which can answer people’s online inquiries, this position may now be under its greatest ever danger.

Google is creating its own AI products as a countermeasure. But, its chatbot, Bard, did not have the best beginning. Last month, a Google advertisement revealed that Bard’s response to a question regarding the James Webb space telescope was incorrect.

In addition to status, having the most popular website in the world brings great cash from advertising income. But, recent abrupt changes in the technological environment have generated uncertainty for companies like Google.

The advertising income that contributed to its success may no longer be a certainty. If AI chatbots like ChatGPT begin carrying advertisements, Google’s dominant position in search engine advertising might be threatened.

People’s dependence on Google has frequently been unquestioned, to the point that they may not click past the first page of a Google search results page. Yet, the introduction of new AI platforms has demonstrated that search as we know it does not have to conclude with a list of ranked links to websites. As demonstrated by chatbots, it can instead take the shape of a discussion.

Such artificial intelligence has not been without criticism. Fears have been made that it might lead to plagiarism concerns or, even worse, the loss of revenue and employment for a variety of professions, including attorneys and journalists.

The chief executive officer of OpenAI, the firm that developed ChatGPT, stated that the business is developing tools to recognize language written by artificial intelligence. In a video interview, he continued, “Teachers are naturally concerned about the impact this would have on assignments.” We frequently hear from teachers who exclaim, “Wow, this is an incredible personal tutor for each student.”

Noam Chomsky, a linguist and activist, described the usage of AI technologies like ChatGPT as “a technique to evade learning.” Google meant that we no longer needed to remember information since we could just search for it. Now, with AI, the issue will be whether we are willing to challenge the returned answers.

This paradigm change in how we access and engage with knowledge extends far beyond these worries about how we search and raises issues about Google’s business model, which has been important in putting the company at the top of the technology heap.

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When Google became associated with the term “search,” once-popular search engines like Ask Jeeves, Lycos, and Excite became internet’s “also-rans.” The 2000 deal between the then-more popular Yahoo! website and Google to host the latter as the default search engine cemented Google’s international position.

The collection of new internet-based advertising income was a significant advantage of serving as the portal to the rest of the web. Every Google search result included required sponsored material, which contributed to the company’s current success.

Google’s yearly income has continued to increase year after year since it mastered search better than its competitors two decades ago. It has been able to keep competitors like Microsoft’s Bing at bay partly due to its ability to integrate this service with ad revenue generating in such a seamless manner.

Google is the place to be if you want your organization or product to appear as part of an online search.

The business has used its advertising revenue to construct a large infrastructure capable of handling billions of search queries, in addition to hosting several popular cloud-based applications such as Google Mail, Drive, and YouTube. In terms of producing advertising money, the video-sharing platform proved to be a very worthwhile investment.

Google’s sheer size ensures its continued supremacy. Nevertheless, as advertising revenue begins to migrate to emerging AI platforms that return results with sponsored content, it may be forced to scale back its operations.

Mastering artificial intelligence and integrating it into its services will be crucial to Google’s continuing success. Yet, there are no assurances for a business that has failed at least five times to understand social media. Now, there is no doubt that Google can manage the volume of traffic; the real question is whether or not it can provide the goods.

It is debatable if emerging competitors such as ChatGPT can even come close to managing Google’s volume of requests. The data indicates that this is not the case, since ChatGPT experienced significant challenges earlier in the year when it was unable to accept new users or perform queries owing to excessive demand.

ChatGPT is the platform that has received the most media attention in recent times. But, it may be established competitors such as Bing that give Google the most trouble. Bing is the third most used search engine worldwide, after Google and Baidu.

This might change with the introduction of its own AI search, which will undoubtedly generate more revenue for an established firm. Microsoft’s business strategy, which is diversified across software, hardware, and cloud computing, allows them to be less dependent on advertising income than Google.

According to Statista, Google’s income from advertising revenue has decreased in recent years, but it still accounts for 80% of the company’s revenue. Many may believe Google to be a search engine, yet the firm was created mostly on the back of search advertising.

Without this advertising money, it would not have been able to achieve many of its earlier triumphs, such as acquiring YouTube in 2006 or contributing to the development of the Android mobile operating system. Google’s inability to establish several social networking platforms revealed the business’s flaws and opened the door for Facebook and its parent company Meta to slice into that enormous income pie.

Facebook will also be concerned that Bing and other start-ups would entice advertisers away to what will likely be a plethora of new AI knowledge products. Yet, if Google fails to master AI search in the same way that Lycos and Excite failed to capitalize on their early success, we may find ourselves Googling far less and talking significantly more.

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