By the end of the year, more than a billion people around the world will experience a different Google search experience.
New generative AI features will provide users with more complete and direct answers and provide a conversational overview powered by AI technology.
The transition marks an overhaul of Google’s core search product. And because so many people use the Internet through Google, these changes mean reshaping how millions of people use the Internet and how companies make billions of dollars from it.
Google’s move to an AI-powered response engine is a bulwark against the emerging AI threat.
It’s also a strategic gamble: disrupting the lucrative search ecosystem that Google has created will pay off by making room for a new world order influenced by artificial intelligence.
“There are still more questions than answers about what Google’s search ad revenue will look like with the launch of AI Overview,” said Evelyn Mitchell-Wolf, a senior analyst at eMarketer.
But OpenAI and its Big Tech rivals are advancing rapidly. They’re rolling out new AI services as a counterattack to Mountain View’s search empire. For Google to stand by while others move forward creates its own risks.
While Google’s AI initiatives are designed to improve the way internet queries work, many sites that rely on traditional search results may suffer due to a new paradigm. So could Google’s ad-supported search business, which is the heart of its money-making operation.
Google’s entrenchment as a household verb, 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 search is a big part of that. According to Statcounter data, Google commands more than 90% of the market, dwarfed by the 4% claimed by rival Microsoft (MSFT) Bing.
In both obvious and subtle ways, anything that cannot be discovered through Google may not exist. Google requires the default state across browsers and devices. For most people on the internet, a Google search is the path of least resistance; There’s too much friction to look for something elsewhere.
That’s what makes Google’s move to AI-powered search so important. “The average consumer wasn’t going to adapt their search behavior to generative AI until Google rolled it out,” Mitchell-Wolf said.
To counter criticism that Google’s AI push could undermine the existing business, executives likened AI initiatives to other technology shifts that lead to growth, new formats and advertiser engagement. The way Google sees it, search is more than just a list of blue links, and people turn to the service with all their questions, from quick checks to in-depth research.
“We deeply understand information needs and have a strong technological foundation, and we continue to reimagine what Search can be so it can serve users in new ways,” Google said in a statement.
John Wihbey, professor of media and technology at Northeastern University, said the company is relentlessly data-driven, so internal tests are likely to show that AI overview summaries lead to different types of clicks and events, leading to less web use overall.
Early findings shared publicly by Google suggest that AI Overviews can increase engagement.
At the Google Marketing Live event on Tuesday, the company said that links featured in AI Overviews receive more clicks than if 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.
AI Overviews offers an improved version of search advertising, at least for now.
Echoing Google’s previous move to place ads at the top of search results and sell premium digital real estate, the company announced Tuesday that it will begin placing ads in a section labeled “sponsored” in the AI Overview.
Rand Fishkin, CEO of audience research software company SparkToro, said Google likely believes two things are true: By implementing their own response engine, they reduce the risk of disruption or competition from other AI-powered response engines; and they view the risks to their core paid advertising business as relatively slight, if not non-existent.
The reason AI Overview features don’t negatively impact paid search volume may be because they rarely interfere with the average number of clicks on paid results, he said. Or they offset any decline in ad clicks by having a positive impact on the average number of searches people make.
On a less flattering note, Google’s AI efforts look like a hopeless struggle.
Scott Jenson, a former Google employee who left the company last month, said the AI projects he worked on were “poorly motivated and driven by this panic that as long as it has ‘AI’ in it, it’s going to be great.” In a post on LinkedIn earlier this week, he said the company’s narrow-minded approach stems not from user needs but from a “cold panic that they’re being left behind.”
But some critics see this as a clumsy, reactionary stance, while others describe it as an urgent defense.
If AI models are the next platform to migrate to mobile phones and apps, Google can’t afford to miss it.
Another way to think about Google’s approach is to remember the early days of social media and other burgeoning but now established technology platforms. Their sales pitch to the market was based on growth. At least for a while, gathering users and defining territory was more important than making money.
“It’s a missed opportunity for Google when a consumer chooses another search destination,” Mitchell-Wolf said. “If it is left behind in the AI-driven search race and consumers prefer AI-driven search experiences, there will be fewer queries for it to monetize. “How money will be made is secondary to whether it will happen or not.”
Hamza Şaban is a reporter following markets and economy at Yahoo Finance. Follow Hamza on Twitter @hshaban.
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