TL;DR:
- Google’s dominance in the search market is being challenged by AI-powered search engines like SearchGPT and Perplexity.
- Regulatory actions and the rise of AI search could impact Google’s market share.
- AI search engines offer new ways to find information, but Google’s infrastructure and user base remain strong.
In the world of technology, few companies have achieved the level of dominance that Google has in the search market. The phrase “just Google it” has become synonymous with searching for information online. However, recent developments suggest that Google’s reign might be under threat. New AI-powered search engines like SearchGPT and Perplexity are emerging, and regulatory actions are challenging Google’s monopoly. Could these changes be enough to disrupt Google’s stronghold on search and search advertising?
The Rise of AI Search Engines
Google has been the undisputed king of search for over two decades. With over 90% of the search market, Google’s success is not just due to its product but also the strategic partnerships it has formed over the years. Google Search is the default search engine on most browsers, including Safari. However, both these aspects are now under threat.
“The regulatory actions will definitely impact those partnerships that Google has created and will shrink the market share,” says Roshat Adnani, managing director APAC at M&C Saatchi Performance. “However, a significant impact might happen because of the challenges faced at the product level. Open AI has changed consumer behaviour through ChatGPT, and SearchGPT might also have the potential to disrupt consumers’ search behaviour. There will be more AI-powered solutions that will continue to threaten Google.”
The Impact of Antitrust Rulings
Although Google was found guilty of antitrust violations, the full implications of this landmark decision are yet to be declared. Google has stated that it will appeal the verdict, and it’s unclear what the enforced remedies will be. The impact will differ based on how severe the required steps are.
“While the ruling may create some opportunities for competitors, I am not optimistic that they will develop a compelling enough alternative to significantly shift user preferences,” says Andrew Desmond, senior paid media director at Jellyfish. “Even if they do, they won’t just be competing against Google’s search product, they’ll be battling user inertia, which is a much tougher challenge. Until Google is no longer the default—whether by user choice or due to changes in contractual agreements with their various partners—they will continue to dominate.”
The Potential of AI Search
While Google may currently have a stronghold on the search market and search advertising, the rise of AI search is a growing threat. The speed at which OpenAI’s ChatGPT became mainstream demonstrates the potential of AI to disrupt the established order.
“Generative AI is revolutionising the search industry,” says Jim Yu, founder and executive chair of BrightEdge. “The emergence of AI-driven search engines was the first step towards opening up the search landscape to new entrants with the potential to disrupt Google’s stronghold, and now the antitrust ruling can serve as an accelerator.”
There is potential for newcomers like Perplexity and SearchGPT to break through to consumers. “The growth of AI search is indeed exciting and could potentially compete with Google, especially if it can solve some of the challenges we face with Google’s search engine,” says Arun Kumar, director of activation and experience, APAC, Assembly. “For instance, SearchGPT aims to prioritise high-performing, relevant content over a cluttered environment of advertisements, snippets, and untrustworthy SEO-optimised or AI-generated content, to establish a new standard for search technology.”
Google’s Response to AI Competition
Mindful of the competition in the AI search space, Google has already made moves to reinforce its position as the search leader by launching AI Overviews. An advanced search facility powered by generative AI, it combines multi-step reasoning, planning, and multimodality with Google’s best-in-class search systems. But will AI Overviews be enough for Google to maintain its market leader position and steer off the competition?
“We expect new entrants who are able to garner market share to co-exist with Google,” says Yu. “In order to do so, other AI-native engines will need to offer a better product or differentiate for specific use-cases, which we are starting to see with the SearchGPT prototype.”
In contrast to standard search engines that barrage you with links, SearchGPT provides straightforward, conversational responses supported by real-time data. The goal is to improve the speed, accuracy, and appeal of finding information. At the moment, SearchGPT is in the prototype stage and accessible to a select few testers. Both SearchGPT and Perplexity have a greater opportunity to compete with Google in the search landscape, but that will likely come through integrations.
“For instance, I expect that few users will go directly to SearchGPT anytime soon, but utilising Copilot on Bing (powered by OpenAI) could grow the chatbot’s market share more quickly than a standalone product,” says Eric Hoover, SEO director at Jellyfish.
The Main Obstacles for AI Search Engines
The main obstacles for AI search engines are accuracy and the potential spread of misinformation, meaning marketers and users must stay alert about the content they rely on. “We might see a future where different tools cater to different needs. For example, search engines used for general queries and AI-powered tools used for more intricate conversational searches,” says Adnani.
While both SearchGPT and Perplexity are strong contenders in the AI search category, Google still has the advantage of data, infrastructure, resources, and experience. “Google’s seamless integration across its services, like Gmail and Maps, sets a high standard for user experience and convenience that is hard to match,” adds Adnani. “Google is also actively investing in AI to improve its search capabilities. Thus, it is difficult to rule out Google.”
Google’s Dominance in Search Advertising
Google has built an integrated ad ecosystem—including Google Ads, YouTube, and the Google Display Network—which offers advertisers a comprehensive platform for reaching target audiences through an omnichannel approach. As to the Justice Department lawsuit, Google currently holds a dominant 70% share of the internet search ad industry and is estimated to have 39% of the global digital ad market. This means that it has a larger market share than its nearest competitor, Meta, and the combined market share of the next eight competitors.
It’s still early days, but as new entrants gain traction, we might see advertisers beginning to diversify ad spend across engines to better reach different audience segments. “We may also see competition drive innovation in ad formats and models,” says Yu. “Think more interactive ads, AI-driven personalisation, or new performance metrics, challenging Google’s current offerings.”
We’re also likely to see companies taking advantage of generative AI in new ways and expect to see a wave of innovations coming to search. “For example, the latest voice chat capabilities from OpenAI are very impressive and could lead to a completely new way of voice-activated searching,” adds Yu. “Similar to when the iPhone launched, it was impossible to predict that Uber may one day exist. The sky’s the limit as to what new ad formats might come from generative AI search.”
The Future of Search Advertising
However, for the foreseeable future, Google will continue to dominate search advertising. Google’s well-established infrastructure, devoted customer base, and superior product continue to pose serious obstacles for new competitors, even in the face of the growing popularity of AI search and possible competition from services like SearchGPT and Perplexity. Furthermore, Google is expected to monetise AI search results through shopping listings and sponsored adverts in the future, further solidifying its lead in search advertising even if AI search will become more common.
“While there may be some incremental changes due to the antitrust ruling or the development of AI search, a major shift in search dynamics or a significant increase in competitor market share in the near term is unlikely,” says Hoover. “Therefore, marketers should remain focused on optimising their strategies for Google as it will continue to be the primary platform for search advertising. Any substantial changes are more likely to occur after a final settlement from Google’s appeal, which could be years away.”
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