Google, the company that completely revolutionized online search, email, and the phone industry, has been facing the biggest threat to its core business for almost two years, and it doesn’t seem to quite know how to react to it.
Why it matters. Most of Google’s revenue comes from the ads it displays on its search engine. ChatGPT and its rivals offer direct answers rather than a list of links, and more and more people are using these chatbots for certain types of queries rather than to Google.
With fewer ads to display, Google’s business model is faltering, as writer Om Malik points out in a very interesting post.
Some context. ChatGPT emerged 20 months ago and revolutionized the game, starting with a rapid surge and then gradually progressing. Around the same time, Google introduced Bard, later expanding it under the name "Gemini." Additionally, Google announced synthetic answers for searches, but faced challenges during its initial launch.
Google has been a pioneer in developing much of the technology that powers today’s AI. In 2018, Google CEO Sundar Pichai predicted that the potential impact of AI would be comparable to that of electricity or fire. However, the rise of OpenAI seems to have caught Google off guard, particularly in relation to end consumers.
Behind the scenes. Clayton Christensen, an innovation expert and author of books like The Innovator’s Dilemma, has described a common situation among companies:
- They excessively focus on their current business model.
- They’re fearful that the status quo supporting their business will change.
- They prioritize incremental improvements over radical innovations.
As a matter of fact, we’ve observed this pattern in technology leaders of the past.
Some perspective. We’re currently experiencing a shift in how we access information online.
- Previously, we used to enter keywords and receive a list of ten blue links, often accompanied by ads.
- We’re now moving towards a phase where we can ask questions in natural language and receive direct answers.
- The Internet is becoming more personalized, and we’re entering a post-browser era.
Google’s business model still heavily relies on users viewing the list of blue links and clicking on sponsored results.
The big question. Can Google adapt to this changing landscape in time? It was evident that it would be very challenging for any competitor to displace Google as the dominant search engine. Only a solution that goes beyond imitation and truly innovates has the potential to achieve this. ChatGPT (and the future SearchGPT), or any successor, embodies this approach.
Companies like IBM (personal computers), Microsoft (phones), and Yahoo (search engines and mail) have faced similar challenges in the past and struggled to adapt successfully. Despite having the necessary talent, resources, and technology, Google will need to counterattack in time and break away from its own established legacy to remain competitive.
This article was written by Javier Lacort and originally published in Spanish on Xataka.
Image | Greg Bulla | OpenAI| Xataka
Related | OpenAI Just Announced SearchGPT, a Direct Challenge to Google’s Search Engine
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