Is this the end of Google Search? How the giant could lose its lead

Google's search just isn't hitting the same way anymore do anyone else notice that Google is absolute garbage lately think I might try to start using Bing or Duck Duck Go searching for even the simplest piece of information on Google right now makes me feel like the whole world is playing a prank even Wall Street is taking issue I think there are some concerns on on use of competitive AI tools as an alternative to search the mainstreaming of generative AI open ai's chat gbt moment it took the Behemoth by surprise and it could now threaten to knock it off the podium everybody who's watching technology the entire Market understands that Google's been slow here A Perfect Storm of younger platforms encroaching I also use Tik Tok as Google Now like anytime I want to know anything nimbler hungrier startups hot on its tail the water perplexity dust is a paradigm shift in search wait a minute if we started all over is there a faster better cheaper way to do this that's exactly what we did with Arc search Mega caps looking to steal share I hope that with our Innovation um they will definitely want to come out and show that they can dance and I want people to know that we made them dance this week on Tac check how to lose a lead is this the end of Google search as we know it search has been about 10 blue Lings for the last like 20 years and 10 Blue Links was always a hack at the end of the day people just wanted an answer that's arvan serenas the CEO of perplexity a startup that has set its sights on Google search he says that generative AI has led to a shift that creates a new opening in search we are trying to move you to a paradigm where why just like how you talk to a person you just directly come and ask your question you don't have you don't talk to a person by typing in key like speaking keywords and he has a very impressive roster of investors including the likes of Amazon founder Jeff Bezos and existing AI darling Nvidia and he's not the only one to taking this on Arc which started as a browser to replace Chrome now also has an app dedicated to search we're actually doing to Google search what Google did to the web before they've even announced a partnership in which perplexity is the default search engine on ark's browser a coalition of startups trying to reinvent search like satch and Adella they have the 800lb gorilla on this they say that Google size makes it slow to innovate 10 Blue Links is the way it has been for years classic innovator's dilemma how could you think anything is going wrong you've got billions and billions of people using your search engine every day you are printing cash the best business model ever invented instead perplexity interface is clean and simple users they can ask questions and the AI gives you a summary of an answer and even includes sources arcs app uses a browse for me function that reads web pages for you and creates a short Report with all the details you need it might be easier to show some examples here's how they look when searching for the Super Bowl in all three you can easily see the date and time displayed now let's give it something more challenging like what was qualcomm's first quarter 2024 earnings first up Google it gives you those Blue Links and you have to click on each of them to really get the numbers perplexity writes a summary based on different news sources and Arc breaks it down in bullet points that are easy to skin but what if you wanted to search for something more subjective like what are the best boots for women while Google's results are filled with sponsor options links from companies that pay to be there no ads though from perplexity and Arc searches because they're not trying to sell you something instead they're giving you Trends and categories even before gen AI chat Bots users were turning to social platforms for more objective results a younger generation is increasingly replacing traditional search with Tik Tok or Reddit I grew a garden yesterday yeah only from Tik Tok no YouTube no Google Tik Tok now when people Google things they type in like Jaclyn Hill lipstick gate Reddit and they go to Reddit because that will actually give you the answer another crop of competitors that could be grabbing share one Google executive has even said that almost 40% of young people when looking for a place to have lunch they don't go to Google Maps or search they go to Tik Tok or [Music] Instagram Google was supposed to own artificial intelligence 7 years ago CEO Sunder Pai he declared that Google would become an AI first company we've talked about this important shift from a mobile first to a AI first world and we are driving it Forward across all our products and platforms it also acquired startup Deep Mind in 2014 securing the brightest Minds in the field of AI and merging it with its own AI efforts Google had po position but instead chat GPT stole its moment two weeks ago a new artificial intelligence program called chat GPT made its debut online the chat GPT phenomenon everyone's been talking about the chat GPT Microsoft got credit for its multi-billion dollar investment and cloud and profit sharing Arrangements Microsoft also knew how to make it hurt it would go after Google's Cash Cow search and so Sachi nadela and teen they began integrating chat gbt into its own search engine Bing it's a new race in the most important software category or the largest software category in search uh let's face it uh Google dominates it we are thrilled to be here launching Bing to compete Google scrambled releasing it own AI chat bot Bard in an event the very next day Bard seeks to combine the breadth of the world's knowledge with the power intelligence and creativity of a large language models but even Google's own employees called the launch rushed and botched with shares tanking 10% after that demo they also threw some words back at uh CEO SAR Pai saying how is this keeping focused you know this is seeming like a a rushed reaction to What Microsoft is is doing with chat GPT later that year Google tried again publishing a video demonstration of its new large language model called Gemini critics called it faked and misleading it was edited it was it was cut to look like it was faster and more capable than it actually is so while Google promised AI first years ago it has yet to fully integrate it into search in a way that impresses investors and consumers when you think about the way that chat GPT is making Headway or even being right what Google risk right now is losing that user Behavior to its competitors and now the search threat may be showing up in Google's financials 2023 4th quarter search ad Revenue nearly missed analysts expectations and CFO Ruth poret hedge Search growth going forward as we enter 2024 with advertising revenues of more than 100 billion higher than 2019 we remain focused on sustaining Healthy Growth on this larger base analysts they tried to get at the question on everyone's mind is is AI hurting Google are people turning Elsewhere for search I think there are some concerns on on use of competitive AI tools as an alternative to search just wondering if you've seen any changes in in query volumes positive or negative since you've uh seen the year evolve and and more searched inovative experiences and what can really make Google Stand Out versus other AI tools instead Pai seem to dodge the question we we've been doing this for a long time and I think what ends up mattering is a a a strong continuous track record of innovation uh obviously generative AI is is is a is a new tool in the Arsenal so what is Google's response to the chat Bots I think uh through the year two when we test we test surgeon R of experience particularly uh against everything that's out there and you know we can see uh the progress we are making and how much users are liking the experience better Google is calling it search SE generative experience or sge for short first announced in May at its developer conference you'll notice a new integrated search results page so you can get even more out of a single search there's an AI powered snapshot that quickly gives you the lay of the land on a topic now that video it did seem to appease investors and Shar Rose back to its level from before that first botch Bard roll out but the hype was shortlived as Wall Street again started to question if Google was quick enough Nimble enough to keep up in the fast moving AI arms race part of the issue Google remains in test mode test Surge and R of experience it may be early but others like open Ai and Microsoft they're doing more than just testing they're promoting their chat Bots and they're making them the default instead Google is using a tentative roll out for what is supposed to be its Blockbuster response to impending AI threats meanwhile a new class of younger platforms and Native generative AI startups are taking aim of course for all those efforts Microsoft Tik Tok startups they've barely made a dent in Google's dominance it had 93% of the market share in December 2022 as chat gbt launched 92% a year later it's been the dominant search engine for decades and it's hard to change consumer Behavior people are questioning whether Google was is truly the leader in AI uh remember Google remember chat GP is built on something that Google released s or 8 years ago I'm in the belief that Google their 20-year lead in search is going to inform better AI decisions you're going to go to Google more over time and there's more opportunities for them to monetize search and so big picture here the Google story is intact Plus Google is entrenched it is the default search engine on basically every smartphone in the world Google has one of the most resilient consumer products of all time two of the most resilient consumer products of all time in Search and in YouTube Google own the Android operating system and it pays billions of dollars a year to Apple for that privilege on the iPhone but perhaps Google's biggest Advantage it's data Google has been the gateway to the internet almost since the internet went mainstream generative AI needs vast diverse and relevant data to train its models and no one has more data than Google the question is whether Google can harness it in the age of [Music] AI [Music] sh

Channel: CNBC Television

Views: 762,881

Keywords: app, business news, cnbc, digital, disrupt, funding, innovation, investors, nasdaq, nyse, online, silicon valley, startup, stock market, tech, techcheck, technology, venture, wall street

Id: luWf6Zfyvms

Length: 10min 42sec (642 seconds)

Published: Fri Feb 02 2024