By the end of the year, more than 1 billion people around the world will experience Google Search differently.
New generative AI capabilities provide conversational summaries powered by AI technology to help users get more complete and direct answers.
The move represents an overhaul of Google's core search product. And since many people experience the Internet through Google, these changes amount to reshaping the way millions of people use the web and the billions of dollars that companies make from it. Masu.
Google's move to an AI-powered answer engine provides a bulwark against new AI threats.
This is also a strategic bet. The cost of destroying the lucrative search ecosystem that Google has built will be to make room for a new, AI-powered world order.
“There are more questions than answers about what AI Overview will do to Google's search ad revenue,” said Evelyn Mitchell Wolf, senior analyst at eMarketer.
But as OpenAI and Big Tech rivals make strides, introducing new AI services in an assault on Mountain View's search empire, Google will be taking risks by standing by as others forge ahead.
Google's AI initiatives are aimed at improving how internet search works, but many sites that rely on traditional search results could suffer under the new paradigm, including Google's revenue-generating, ad-supported search business.
Google's status as an everyday verb, the primary way we consume information on the web, speaks to its enduring power as an inclusive 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 has more than 90% of the market, according to Statcounter data, far below the 4% claimed by rival Microsoft's (MSFT) Bing.
If something, both obvious and subtle, can't be found on Google, it probably doesn't exist. Google insists on default status across browsers and devices. And for most people using the internet, 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 important. “Until Google rolled out generative AI, the average consumer was not going to adapt their search behavior to generative AI,” Mitchell-Wolf said.
In response to criticism that Google's AI push could cannibalize existing business, executives likened its AI efforts to other technology changes that have led to growth, new formats, and engagement with advertisers. ing. In our view, search is more than just a list of blue links; people come to our service with questions, from quick checks to deep exploration.
“We deeply understand information needs, have a strong technology foundation, and will continue to reimagine what search should be to serve users in new ways,” Google said in a statement. ” he said.
Because the company is so data-driven, internal tests are likely to show that AI summaries lead to more click-throughs and activity, and not necessarily less overall web usage, says Northeastern University. said John Wiebe, professor of media technology.
Early research published by Google suggests that AI Overviews has the potential to increase engagement.
At a Google Marketing Live event on Tuesday, the company said links included in AI summaries get more clicks than if the page were displayed as a traditional web listing for that query. Google also says that people who use AI Overview use search more often and are more satisfied with the results.
At least for now, AI Overview offers an improved version of search advertising.
Following Google's earlier move to place ads at the top of search results to sell prime digital real estate, the company said Tuesday it will begin placing ads in a section labeled “Sponsored” within its AI overviews.
Rand Fishkin, CEO of audience research software company SparkToro, said Google believes two things are probably true: First, by implementing our own AI-powered answer engine, we reduce the risk of confusion and conflict with other AI-powered answer engines. And they believe the risks in their core paid advertising business are relatively light or even non-existent.
He said the AI summary feature has not had a negative impact on paid search volume, perhaps because it has little impact on the average number of clicks on paid search results. Alternatively, it positively impacts the average number of searches people make, counteracting the drop in ad clicks.
From a less flattering perspective, Google's AI efforts resemble a desperate scramble.
Scott Jenson, a former Google employee who left the company last month, said the AI projects he was working on were “low motivation, driven by panic that it would be great if 'AI' was included.” In a LinkedIn post earlier this week, he said the company's short-sighted approach was driven not by user needs but by “a cold panic that users are being left behind.”
However, while some critics see it as a clumsy and reactionary stance, others describe it as an emergency defensive measure.
Similar to the shift to mobile phones and apps, if AI models are the next platform, it's one that Google can't afford to miss out on.
Another way to think about Google's approach is to think back to the early days of social media and other fast-growing but now established technology platforms. Their sales pitch to the market was based on growth. At least for a time, attracting users and securing territory was more important than making money.
“Every time a consumer chooses a different search destination, it's a missed opportunity for Google,” Mitchell-Wolf said. “If we are left behind in the AI-powered search race and consumers prefer AI-driven search experiences, there will be fewer queries that can be monetized. It’s secondary to whether or not you can do it.”
Hamza Shaban is a reporter for Yahoo Finance, covering markets and economics. Follow Hamza on Twitter. @hshaban.
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