After courting controversy for weeks following its decision to retain third-party cookies, Google finally had some good news last weekend when Google DeepMind's experimental Gemini 1.5 Pro claimed the top spot on the AI Chatbot Arena leaderboard, surpassing OpenAI's GPT-4o and Anthropic's Claude-3.5, which previously dominated the global rankings.
However, despite that happy achievement, Google has more concerns on its plate. Cookie deprecation (or the lack thereof) aside, OpenAI announced SearchGPT, a soon-to-be-launched AI-powered search engine that is taking on Big Tech, especially Google, on their own turf, given that search is the bedrock on which Google was built.
“With the rise of tools like SearchGPT and ongoing concerns about cookies, we're likely to see a gradual shift in user and advertiser behaviour. We aren't fully aware of SearchGPT data privacy credentials yet, because it is still in its prototype phase,” says Samir Asher, Co-Founder and COO at Tonic Worldwide, adding that as yet there isn't enough of a push to make users switch from Chrome, largely because Chrome has established a significant market share for itself, and people are uncomfortable with a change in the experience they get from their browsers.
Privacy First?
There are users who are concerned about their privacy and have switched to browsers such as Firefox and Brave. For instance, Brave's built-in ad blocker and emphasis on privacy could attract users seeking more control over their data.
Prashant Puri, Co-Founder & CEO, AdLift, agrees pointing out that today, we are looking at a very discerning and privacy-conscious audience.
“Google's proactive measures, like the Privacy Sandbox and the browser's substantial market share, provide strong incentives for users and advertisers to stay and adapt rather than abandon the platform entirely. The shift will likely lead to a more privacy-conscious web environment, encouraging stakeholders to embrace new norms and technologies,” he says.
There is plenty of reason for Google to be wary of potential threats in the Search domain. According to reports, Google's search and other revenue in 2023 was $175.04 billion, which is 56.93% of the company's total revenue of $305.63 billion. This revenue comes from ads on Google's search results pages and other search-related services.
Pulkit Narayan, Founder and CEO, DangleAds Technologies says a significant exodus from Chrome is unlikely for several reasons. “Firstly, users prioritize convenience, speed, and integration, all of which Chrome excels at. With its user-friendly interface and seamless integration with Google's extensive suite of services, Chrome has established itself as the preferred browser for a vast number of users.”
Changing browsing habits is also generally slow and requires substantial motivation, which current privacy concerns may not sufficiently provide for most users. Users and advertisers would need compelling reasons to make a switch, and while privacy is important, it may not be sufficient to drive a mass migration.
“Let’s understand what is being offered and compare it with Google. SearchGPT gives you information summary or a list with summaries, while Google gives the information in multiple ways (depending on the query). It gives you an approximately 50-word summary if you ask the meaning of something, along with some video and then usual URL links. Additionally, you might also see shopping product links, thumbnail of recipes, stock market prices, graphs, calculators, flight search etc etc. You also see sponsored ads which come on top of the search result,” says Amit Verma, Founder and CEO, DigitUp.
On the other hand, the target audience for SearchGPT is specific, especially going by the current iteration of ChatGPT. “SearchGPT is likely to conclude an answer leading to poor creativity at human end. A user who would take SearchGPT information as it is would eventually find that it is not creative enough and would be inclined to search again and at this point would turn back to Google for more options,” says Verma.
Service-centric
In fact, Preetham Venkky, Chief Digital Officer at DDB Mudra Group, believes Search GPT from OpenAI is a limited tool and “likely a one-trick pony”. Venkky argues that Google's dominance as the default search engine on browsers like Safari and Chrome makes it the preferred choice for most users, and further questions the incentive for users to switch to Search GPT, especially considering concerns about its accuracy and potential biases.
Venkky highlights the importance of trust and accuracy in search results, contrasting SearchGPT with PHIND, another AI model focused on providing unbiased results. “There is still a moat, and my belief is early entry is the strongest moat any AI company would have, meaning SearchGPT would face significant challenges competing with established search engines not to mention the potential limitations of its business model.”
Google's parent company, Alphabet Inc., reported a 14% year-over-year increase in revenue for its core Google Search business in the second quarter of 2024, bringing the total to $48.5 billion. This was up from $42.6 billion in the same quarter of 2023.
Sajal Gupta, Chief Executive at Kiaos Marketing, adds Google's extensive infrastructure, data resources, and ongoing investments in AI and search improvements make it a formidable competitor. “Google is also likely to adapt by incorporating new technologies and refining its own search capabilities to maintain its dominant position. As mentioned by all the tech CEO’s during their quarterly business reporting last week all of them are betting heavily on AI and have scaled up investment in AI related research and product development. While there is a lot of promise in AI, it will be interesting to see the outcome disrupts the market.”
“For advertisers, Chrome's large user base is a critical factor. The browser's extensive reach and robust data analytics capabilities make it a powerful platform for targeted advertising. Despite increasing privacy concerns, advertisers are likely to continue leveraging Chrome due to its ability to deliver effective ad targeting and measurable results,” says Narayan, pointing out that many advertisers have already adapted to evolving privacy regulations, developing strategies that balance compliance with performance.
Any significant policy changes are likely to be industry-wide rather than targeting Chrome specifically. This means that all major players in the industry will need to adapt, not just Chrome, further diminishing the likelihood of an exodus from this particular browser.
“AI is primarily an enterprise game, with limited impact on the B2C market. Consumers are more likely to use AI tools provided by large companies rather than subscribing to individual services. So basically, ChatGPT is now competing for companies’ attention. And I feel that is what most people have missed in this conversation. It's a B2B conversation, and has nothing to do with B2C. With the former, even if you have a lot of new sign ups and users overnight, it’s a $ 4-5 billion business. If they want to have a 100 billion dollar business, it's a B2B conversation,” says Venkky.
