Google has been struggling to keep up with the rise of artificial intelligence (AI) and its impact on search engines. With the success of AI chatbots like Perplexity, which offers more relevant and ad-free results, Google is facing a crisis of relevance. As users increasingly rely on AI-powered search engines, Google’s advertising-driven business model is under threat.
The first quarter of 2025 has shown signs of a downward spiral for Google Search, with revenue projected to shrink gradually or even collapse within a few years. This poses a significant challenge for the company, which generated $218 billion in revenue from Google Search in 2024, accounting for 56% of its total revenue.
To combat this threat, Google has unveiled an array of new products and upgrades at its annual I/O conference, all heavily focused on AI. These include a conversational AI assistant, incognito AI overlays, and advanced video generation capabilities. However, experts argue that these efforts will not be enough to save the company from the challenges posed by AI-powered search engines.
The marketing strategy behind these new products is overwhelming, with each one requiring a unique go-to-market approach and targeting different market segments. This highlights a dilemma for Google: while it can’t compete directly with AI chatbots, it can try to overwhelm them with an array of features and capabilities.
However, the underlying architecture of ChatGPT was published in 2017, making AI app development relatively accessible. Deep-pocketed players are already competing fiercely in this space, leaving Google vulnerable to disruption. The question remains: where will Google find its next revenue stream?
As panic sets in among executives, Google is not alone in facing these challenges. Experts and analysts are crying out for new business models and revenue streams that can compete with the threat of AI-powered search engines. One thing is certain – the future of search dominance is uncertain.
Source: https://medium.datadriveninvestor.com/flooding-the-zone-googles-response-to-the-threat-of-obsolescence-980ededb1a14