The Search Game Begins
When was the last time you had a choice in search engines? Maybe during the Yahoo era from the 90s. However, with the emergence of multiple AI-powered search options, it seems like we are experiencing a resurgence of that era – the likes of all new Bing Search, You.com, DuckDuckGo, etc. For quite some time, Google has been the dominant force in the search engine and advertising market, and it goes to great lengths to maintain its position. As per reports, Google paid about $8-12 billion to Apple in 2020 to be the default search engine on all Apple devices, and about $3 billion to Samsung for the same privilege. However, recent reports indicate that Samsung is contemplating a switch to Bing as its default search engine, with Apple likely to follow suit. Looks like the ChatGPT-powered Bing has instilled a newfound confidence in the company, making them go on a bidding war with Google to capture a share of the vast advertising revenue that Google currently enjoys from these contracts. A leaked PR? “If the biggest Android vendor shifts away from Google services, it could trigger other OEMs like Xiaomi, etc to look into Microsoft alternatives. We can think of it as a negotiation tactic. OEMs are probably looking for a better deal,” said Sravan Kundojjala, principal industry analyst at TechInsights. Quite evidently, the OEM companies are taking advantage of the hype around AI, as well as the insecurities of Google, who are kept at the edge by the Microsoft-OpenAI duo. And it is easy to do so, considering how much that ad revenue is important to Google. However, some have debunked this possibility. Andreas Proschofsky, editor of Austrian daily derStandard, explains that all Android OEMs have to sign a Mobile Application Distribution Agreement (MADA) if they want to get a licence to use the Play Store and other Google apps. The licence also includes a bunch of rules which includes setting Google Search as default in most countries. As with countries like Europe and India, regulators issued an antitrust ruling allowing users to choose default search engines on Android-based smartphones. This, Proschofsky says, are Google’s standing rules in return for giving Android and its services away for free. Therefore, this can be construed as “Samsung trying to do leak PR to get a better revenue sharing deal from Google.” The most that can happen is Bing would come pre-installed and would be used in Bixby and Samsung Internet, or some other prominent ChatGPT integration. According to Kundojjala, “Realistically what we will see play out is an increase in Google’s cost of doing business as OEMs demand better terms.” Future of search is uncertain It’s worth noting that this wouldn’t be the first time Bing will be the default search engine on Samsung devices. In 2010, certain models of the Galaxy S II had Bing as the only search engine, making it difficult for users to even switch to Google. At the time, Bing was relatively new and ambitious, but ultimately, failed to gain much traction. Even experts at the time were sceptical of its long-term viability, citing concerns over whether the ad revenue will make up for what it paid to Verizon and other service providers. A similar question will appear all these years later. Will Microsoft be able to make up in ad revenue for the amount it will be paying to OEMs to keep Bing the default search engine? In March this year, Microsoft surpassed 100 million active users after integrating its search capabilities with OpenAI’s GPT-4. Since then, the company has been testing the addition of advertisements in Bing Chat responses. According to reports, Microsoft has increased its advertising revenue to $18 billion over the past 12 months, up from $10 billion in the previous fiscal year. Despite its recent success, Microsoft still has a long way to go before it can catch up to Google’s advertising revenue of $200 billion in 2022. Previously, Microsoft has stated that for every 1 percent of the search business it takes from Google, it can add $2 billion in revenue. In this regard, Microsoft’s recent $8 billion surge in revenue is a noteworthy accomplishment. It appears that Microsoft finally got the weapon to challenge Google in the search industry. But it won’t be easy, mainly for two reasons. To begin with, there remains a great deal of uncertainty surrounding generative AI and its ultimate applications. It’s unclear how many individuals will utilise Bing Chat, particularly given concerns related to misinformation, bias, and security concerns with chat-based interactions. Secondly, there are reports that Google is currently developing a new search engine called ‘Magi’. Although it’s uncertain if this product will ultimately be released, given Google’s history of shelving product ideas, nevertheless, it’s interesting to contemplate what decisions the company might take ahead.
OEM companies look to rake in more moolah from search, all in the name of AI
OEM companies look to rake in more moolah from search, all in the name of AI
["Apple", "Bing Chat", "Google", "Samsung"]
["Go", "ChatGPT", "Samsung", "OpenAI", "AI", "Apple", "RPA", "GPT", "generative AI", "Google", "Rust", "R", "Bing Chat", "llm_models:GPT"]
["AI", "generative AI", "ChatGPT", "OpenAI", "R", "Go", "Rust", "GPT", "RPA", "llm_models:GPT"]
Ayush is interested in knowing how technology shapes and defines our culture, and our understanding of the world. He believes in exploring reality at the intersections of technology and art, science, and politics.