The End of Google’s Dominance

01/26/2023

5 minutes read

2023.01.26 12:13

By Ray Johnson

Budrigannews.com – Due to the strength of its online search engine and digital advertising business, Google has appeared to be unstoppable for more than 15 years. However, both appear to be getting weaker.

This week, the Justice Department demanded that portions of Google’s online advertising business be broken up and accused Google of operating an illegal monopoly. The Trump administration filed a similar suit a few years ago to challenge the tech giant’s dominance in search.

Google asserted that the most recent suit “attempts to pick winners and losers in the highly competitive advertising technology sector” and that the Justice Department is “doubling down on a flawed argument.” However, if both cases are successful, they could upend a business model that has made Google the most powerful online advertising company. Since the US government took on Microsoft more than 20 years ago, it would be the most significant antitrust victory against a tech giant.

However, despite the fact that the lawsuits strike at the heart of Google’s revenue engine, their resolution could take years. In the meantime, Google’s future could be decided sooner or later by two additional contentious issues: the rise of generative artificial intelligence and what appears to be an ever-increasing loss of Google’s market share in online advertising.

Google announced plans to lay off 12,000 employees just a few days prior to the DOJ suit, citing a significant slowdown in revenue growth and an effort to refocus its efforts on AI.

Online searches have long been associated with Google; It was one of the first modern technology businesses whose name became a verb. But a new threat emerged at the end of last year when the AI chatbot tool ChatGPT was made public by OpenAI, a research company.

With just a simple prompt, ChatGPT users have shown that the bot can write poetry, write legal documents, code, and explain complicated concepts. ChatGPT, which is based on a lot of data from the internet, can answer simple questions like, “Who was the 25th president of the United States?” and provide lengthy responses to open-ended questions. However, it may make some mistakes. which might have required scrolling through Google’s search results in the past.

In order to respond to user prompts, ChatGPT is trained on a large amount of data. Even though the technology that underpins ChatGPT has been around for some time, the fact that anyone can sign up for an account and play around with the tool has created a lot of hype for generative AI and made the technology’s potential immediately understandable to millions of people in a way that it had been previously only abstract. Additionally, it is said to have prompted management at Google to declare a “code red” situation for its search business.

It’s possible that Google is just a few years away from total disruption. “The Search Engine Result Page, where they make the most money,” Paul Buchheit, one of Gmail’s creators, tweeted last year. “AI will eliminate the Search Engine Result Page.” They can’t fully implement AI without destroying their most valuable asset, even if they catch up on AI!

The argument goes that Google’s search advertising, which is part of a $149 billion business segment, may suffer if more users start to rely on AI for their information needs. This idea has been reinforced by media coverage of ChatGPT, with some outlets comparing ChatGPT to Google in head-to-head tests.

There are a few reasons to doubt Google’s ability to survive this nightmare scenario.

First of all, Google operates on a completely different scale. According to the traffic analysis website SimilarWeb, Google’s website received more than 86 billion visits in November, while ChatGPT received less than 300 million. Ende of November saw the public release of ChatGPT.) Another reason is that Google could still analyze user queries in the same way it does now to provide search advertising even in a world where it provides precise, AI-generated responses to user queries.

Google has invested in highly developed artificial intelligence on its own. LaMDA, one of its AI-driven chat programs, even became a point of contention last year when a company engineer claimed it had reached sentience. For violating company policy, Google has denied the claim and fired the engineer.)

According to reports, Google CEO Sundar Pichai has informed employees that, despite the fact that Google possesses capabilities that are comparable to those of ChatGPT, the company has yet to make a commitment to providing AI-generated search responses due to the possibility of providing incorrect information, which could be detrimental to Google in the long run.

As the most trusted search engine in the world, Google’s position highlights both its enormous influence and one of the fundamental issues with generative AI: It is nearly impossible to determine how the technology arrived at a particular result due to its black-box design. Being able to independently evaluate various information sources may outweigh the convenience of receiving a single response for many people, and for many years to come.

All of this has taken place in the midst of what appears to be a prolonged, multi-year decline in Google’s market share for online advertising. According to third-party industry estimates, Google’s position in digital advertising reached its highest point in 2017 with 34.7% of the US market, and it is expected to reach 28.8% this year.

This isn’t just a problem for advertising giants like Google. The online advertising industry has been significantly impacted by one-time events like the pandemic and the war in Ukraine, as well as concerns about a forthcoming recession. Others, like Facebook’s parent company Meta, have been particularly vulnerable to systemic changes like Apple’s app privacy updates that limit how much information marketers can access about iOS users.

However, Google also faces new market competition, which contributes to the decline. Digital advertising revenue has been shifting in favor of rivals like Amazon, TikTok, and even Apple.

Whatever the reason, Google’s still-vast advertising business appears to be facing increasing obstacles. And if some of the predictions about generative AI come true or if the Justice Department’s lawsuits ultimately weaken Google’s hold on digital advertising, these obstacles might get worse.

The US government has requested that a federal court reverse two acquisitions that are alleged to have contributed to the establishment of a Google advertising monopoly as part of the case. According to the US government, dismantling Google’s tightly integrated advertising system will restore competition and make it more difficult for Google to obtain monopoly profits.

Even though these and other antitrust lawsuits pose a threat on their own, they simply add pressure to Google’s overall dilemma as it faces a new era of potentially turbulent technological change.

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