Imagining A World Without Google (NASDAQ: GOOG)

Imagining A World Without Google (NASDAQ: GOOG)

Nicholas Thompson, CEO of The Atlantic, told The Verge last Thursday that OpenAI is developing a search product to rival Alphabet Inc’s Google. He made these remarks on a podcast discussing the recent partnership between The Atlantic and OpenAI which allows the latter to crawl thousands of archived articles published by the magazine to enhance its AI models and potentially train the models on high-quality data and articles. In addition to The Atlantic, several other high-profile publishers such as Business Insider and Politico have also made new deals with OpenAI to enable their content to be crawled by ChatGPT while responding to queries. These partnerships will help the AI giant accelerate the development of its search product, likely threatening Google’s dominance.

How Google Manufactured Success

Google, over the last two decades, has maintained its position as the leading search engine worldwide. As of January 2024, Google accounted for 81.95% of the global desktop search engine market while Bing, which came in second place, accounted for just 10.5% of this market. As of February 2024, Google was the dominant player in the mobile search engine market too with a share of almost 96%. This massive success of the company comes down to a few factors, including technological superiority. Google’s PageRank algorithm, developed by Larry Page and Sergey Brin, has played a crucial role in this success as this algorithm has differentiated Google and its competitors. In addition to this, Google’s search speeds, minimalist design, and use of machine learning to improve search results have also played a part in securing this market dominance.

Could It Really Happen?

Since May 2023, Google has lost search engine market share to Microsoft-owned Bing. Google controlled 88% of the search market back then but now controls less than 82%. The primary reason behind this development is the advanced AI features introduced by Bing thanks to its collaboration with ChatGPT. This is an early sign that Google’s dominance can be threatened by incorporating generative AI into search products. Therefore, it seems reasonable to conclude that OpenAI, with its access to vast amounts of data, will pose a meaningful threat to Google once its search product is launched. However, Google is investing in AI aggressively and its generative AI product, Gemini, has also gained traction in the recent past. In the base-case scenario, Google will lose market share but will still continue to be the leader in the search engine space in the foreseeable future.

Dilantha DeSilva has positions in Microsoft. Stocks.News has positions in Google and Microsoft.

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Dilantha DeSilva

Seasoned markets reporter and news editor

Dilantha is a former buy-side equity analyst who now contributes to Seeking Alpha, GuruFocus, TipRanks, and ValueWalk. He is the founder of Beat Billions, a premium investment research subscription service on Seeking Alpha’s Marketplace. He has appeared on CNBC and Bloomberg to discuss stock markets and the global economy.