by By the end of the year more than a billion people around the world will have experienced a search different from Google.
New AI generation features will give users more complete and direct answers, offering a conversational overview powered by AI technology.
The move represents an overhaul of Google’s core search product. And since many people experience the internet through Google, these changes represent a reshaping of how millions of dollars use the web and billions of dollars companies make from it.
Google’s transition into an AI-powered response engine is a safeguard against the emerging threat of AI.
It’s also a strategic gamble: disrupting the lucrative search ecosystem that Google built will pay off by making room for a new world order ushered in by AI.
“There are still more questions than answers about how Google’s search ad revenue will fare with the introduction of AI Overview,” said Evelyn Mitchell-Wolf, senior analyst at eMarketer.
But rivals OpenAI and Big Tech are making headway. They are deploying new AI services as prey against Mountain View’s search empire. Google is taking risks of its own to stand by while others push forward.
While Google’s AI initiatives are designed to improve the way internet searches work, many sites that rely on traditional search results may fall victim to a new paradigm. So could Google’s ad-supported search business, the core of its money-making operation.
That Google has cemented itself as an everyday word, the dominant way to access information on the web, speaks to its enduring power as an all-encompassing gatekeeper.
More than two-thirds of the company’s total annual revenue comes from online advertising. And the search business is a big part of that. Google commands more than 90% of the market, dwarfing the 4% claimed by Bing rival Microsoft (MSFT), according to data from Statcounter.
In obvious and subtle ways, if something can’t be found through Google, it might as well not exist. Google requires a default status across browsers and devices. And for most people on the internet, a Google search is the path of least resistance; there is too much friction to look for something elsewhere.
That’s what makes Google’s move to AI-powered search so significant. “The average consumer wasn’t going to adapt their search behavior to generative AI until Google implemented it,” Mitchell-Wolf said.
Against criticism that Google’s AI push could cannibalize existing business, executives have compared AI initiatives to other technology changes that have led to growth and new formats and engagement for advertisers. Search, in Google’s view, is just a list of blue links, and people turn to the service with their questions, from quick checks to in-depth exploration.
“We have a deep understanding of information needs, and a strong technology foundation, and we continue to rethink what Search can do to serve users in new ways,” Google said in a statement.
The company is relentlessly data-driven, so internal testing likely shows that AI overview summaries lead to different types of click-throughs and activity, not necessarily less web usage overall, John said. Wihbey, a professor of media and technology at Northeastern University.
Early results that Google shared publicly suggest that AI Overviews can boost engagement.
At the Google Marketing Live event on Tuesday, the company said that the links included in AI Overviews get more clicks than when the page appeared as a traditional web listing for that query. Google also said that people who use AI Overviews use Search more and are more satisfied with their results.
At least for now, AI Overviews puts up a spruce up version of search advertising.
Echoing Google’s earlier move to place ads at the top of search results, selling prime digital real estate, the company announced Tuesday that it will begin placing ads in a section labeled “sponsored ” on it within the AI Overview.
Rand Fishkin, CEO of SparkToro, an audience research software company, said that Google likely believes two things to be true: that they reduce the risk of interference or competition from other AI-powered response engines by placing their own in force; and they consider the risks to their core paid advertising business to be relatively light, or even non-existent.
It’s possible that AI Overview features don’t negatively impact paid search volume, perhaps because they rarely affect the average number of hits on paid results, he said. Or they have a positive effect on the average number of searches that people make, leaving any reduction in ad clicks.
In a less flattering light, Google’s AI efforts look like a desperate scramble.
Scott Jenson, a former Google employee who left the company last month, said the AI projects he was working on were “badly motivated and driven by this panic, as far as ‘AI ‘ there, it would be great.” In a post on LinkedIn earlier this week, he said the company’s short-sighted approach was not motivated by user needs, but by “the stone-cold panic they’re leaving behind.”
But what some critics see as a knee-jerk, reactionary posture, others describe as urgent defensiveness.
If AI models are the next platform, like the move to mobile phones and apps, Google can’t lose.
Another way to think about Google’s approach is to recall the early days of social media and other growing but now established technology platforms. Their sales pitch for the market was based on growth. At least for a while, collecting users and ending the territory was more important than making money.
“Any time a consumer chooses a different search destination, that’s a missed opportunity for Google,” Mitchell-Wolf said. “If it gets left behind in the AI-generated search race and consumers prefer AI-led search experiences, there will be fewer queries to monetize it. How monetization will happen is the same as whether it can happen at all.”
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.
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