Google’s gloomy future: Making money from ads is difficult because ChatGPT, only dominating the Internet for 1-2 years is ‘out of time’?

For over 15 years, Google has seemed an unstoppable force on the Internet, aided by the power of its online search engine and digital advertising business. However, it seems that both of these segments of the search giant are becoming increasingly vulnerable to negative effects.

This week, the US Justice Department accused Google of operating an illegal monopoly in its online advertising business and called for parts of the company to be dismantled. The incident comes a few years after the Trump administration filed a similar lawsuit aimed at Google’s dominance in search.

If successful, both of these lawsuits could upset the business model that has helped make Google the most powerful advertising company on the Internet. It would be the strongest antitrust win against a tech giant since the US government did the same to Microsoft more than 20 years ago.

Even so, lawsuits will likely take years to settle. In the meantime, Google is facing two other tough issues that could determine its future: the rise of artificial intelligence (AI) that can generate new content, and the decline rapidly reducing the company’s online advertising market share.

Just days before the US Justice Department lawsuit, Google announced plans to cut 12,000 employees amid a significant slowdown in revenue growth and as it tries to refocus on AI.

Google has long been synonymous with “online search” – one of the first modern tech companies whose name has become a household verb. But a new threat emerged late last year when artificial intelligence research firm OpenAI publicly released a new AI chatbot tool called ChatGPT.

ChatGPT has demonstrated the ability to fully answer questions from simple to complex in many fields, writing poetry, drafting legal documents, coding or designing. Even many people have used this tool to do the above things, making it smarter and smarter. Therefore, they also want to “chat” with this AI instead of searching for information on Google.

ChatGPT is trained on massive amounts of data and uses this data to generate responses to user questions. According to a report, ChatGPT prompted Google executives to declare red flags for its search business.

“It may only be a year or two before Google is completely affected. The AI ​​will scrap the company’s search engine results page – where they make the most money. Even if they keep up with AI, they won’t be able to fully implement it without destroying the most valuable part of their business,” Paul Buchheit, one of the creators of Gmail, shared on Twitter in 2016. last.

According to Buchheit, if more users start to rely on AI for informational needs, this could reduce search advertising on Google, which is part of the company’s $149 billion business. In addition, the continuous media coverage of ChatGPT has made this tool more and more known.

Despite these concerns, there are a number of reasons why this “nightmare” scenario will not happen for Google.

Google operates on a very different scale. In November last year, Google’s website recorded more than 86 billion visits, compared with less than 300 million for ChatGPT, according to traffic analysis website SimilarWeb. (ChatGPT was released to the public at the end of November 2022).

In addition, Google has also invested heavily in AI. Google CEO Sundar Pichai once told employees that while Google has similar capabilities to ChatGPT, the company has not yet committed to providing AI-generated search responses because of the risk of providing inaccurate information. exactly – which could be detrimental to Google in the long run.

All of the above problems take place in the context of Google’s online advertising market share declining for many years. Google’s position in digital advertising peaked in 2017 with 34.7% of the US market, while this year’s share is only about 28.8%.

Google isn’t the only ad giant affected. Factors such as the pandemic, concerns about the economic downturn have significantly affected the entire online advertising industry. Some other tech giants like Meta, the parent company of Facebook, have also suffered advertising losses.

However, the decline also occurred as Google faced new competition in the market. Rivals including Amazon, TikTok and even Apple have been taking more and more market share in the digital advertising pie.

Whatever the cause, Google’s advertising business, which is still huge, appears to be facing growing challenges, and they could become more severe if some of the AI ​​predictions come true. come to fruition or US Justice Department lawsuits undermine Google’s control over digital advertising.

As part of the lawsuit, the US government asked a federal court to cancel two acquisitions that allegedly helped cement Google’s monopoly position in the advertising space. According to the US government, dismantling Google’s tightly integrated advertising machine will restore competition and make it harder for Google to profit from a monopoly.

This and other antitrust lawsuits are seen as adding more pressure to the dilemma facing Google.

Source: CNN