Google Search: The Possibility of Being Disrupted by ChatGPT

The Generalist recently published an article about the future of Google, ChatGPT, and search. Since the launch of ChatGPT late last year, OpenAI products have been hailed as the future of search and a potential Google killer. So, will Google follow the Encyclopedia Britannica and the Yellow Pages, gradually subverted, or will the emergence of ChatGPT only lead to Google's transformation?

"The reason for Google's success is simple: it shortens the distance from question to answer and finds a way to monetize it."

Author | Mario Gabriele Translation & Analysis | Alpha Rabbit

Content Outline & Highlights

• 1 The history of mankind is the history of constantly searching for the most accurate information.
• 2 Google and the sorting algorithm (the power of Google's sorting algorithm, will AI subvert Google search, why Google wins?) How big is Google Search? ）
• 3 New Competitors: The Breakthrough of ChatGPT (Can ChatGPT subvert search, limitations of ChatGPT, advantages and disadvantages of ChatGPT, understanding search scenarios)
• 4 Looking to the Future: What Will Happen? (How do AI companies make money?) ）

summary

Google, which has a market value of $1.4 trillion, earned $163 billion in revenue from search last year, ran Google for more than 20 years, and maintained a whopping 91% market share in the search space until ChatGPT came along. There have been many rivals who tried to compete head-to-head with Google, but they all failed. But at the end of 2022, OpenAI's ChatGPT was born, which is equivalent to a direct head-to-head battle with Google.

Of course, although ChatGPT is not a pure search engine, ChatGPT can provide more precise answers to many complex questions, and within a few months, ChatGPT attracted more than 100 million users. However, due to the data time frame, ChatGPT has limited knowledge of events after 2021, so it cannot answer the world's most recent search requests.

Also, ChatGPT's answers sometimes seem very serious and formal, like the real thing, but they are actually made up, not necessarily accurate.

However, it looks like most of ChatGPT's flaws are fixable. Of course, advertising is still a viable model. Although ChatGPT is accepting a $20-a-month subscription model, other conversational search products may go through ads. The large amount of unused space, and the immediate nature of chat, constitute an effective business channel.

ChatGPT has sparked interest in conversational interfaces in the tech world, which has encouraged a wave of search startups.

The history of mankind is the history of constantly searching for the most accurate information

How much effort have humans put into getting an accurate answer?

Let's start with a story: King Croesus of Lydian, who sent seven messengers throughout the kingdom in search of the true oracle, was stunned when the Delphi oracle correctly guessed that Croesus was making lamb soup. Delphi is both a god and an advisor, possessing mystical powers and weighing practical issues such as military strategy.

Because gathering the best quality information would take many days to gather even for the richest people in the ancient world.

Searching for information is almost all human dilemmas: our ancestors crossed oceans, climbed mountains, risked disease to visit places full of light. Whether it is to appreciate the wisdom of the Library of Alexandria or to attend an institution of higher learning, these come at the cost of time and travel.

Due to the human quest for knowledge, a business that provides answers is a good choice.

Note that the Yellow Pages and Encyclopedia Britannica were once famous businesses. For decades of the 20th century, the business of both companies was what everyone needed to use every day.

Whether it's the Yellow Pages or the Encyclopedia Britannica, the value they offer is basically the same:

That is, faster access to information.

For most transactions, consumers who need utility and transactionality are able to get the value they need through their products.

This pattern represents a kind of aggregation: packaging the answers to our most common questions and bundling them in convenient modules. In other words, questions that would otherwise need to go to the library or walk to town to answer can suddenly be solved in minutes.

From one perspective, this is the history of human information: the distance between the question and the answer is gradually shortening.

Second, Google and the sorting algorithm

In 1996, the above speculation (the gradual shortening of the distance between the question and the answer) was verified in business history. Stanford doctoral students Sergey Brin and Larry Page officially released the first version of "BackRub," and while there have been other Internet search engines before, none of them are organized by the number of backlinks received through sources.

Today, Google's market cap is $1.4 trillion, reaching $2 trillion at its peak in 2021. Google generated $283 billion in revenue in 2022, up 10% from the previous year, with search contributing 57%.

Although Google's most remarkable thing is its financial prowess, in essence, Google Search represents a non-religious all-powerful science that can produce answers in a fraction of a second, which even the almighty god of ancient Greece may not match.

For the relationship between humans and Google: Google is almost the place where we go to find almost every conceivable problem, whether sacred, mundane, or otherwise.

Google is almost the destination for all kinds of human whimsy:

Like, where should I work? Am I being paid too little? Why do I have a headache? What happened in 1813? Is Messi handsome or not (the author's voiceover answers: handsome)? Did the Knicks win?

Google's advantage is that it can figure out all the answers.

Recently, however, the tech community paid attention to the company's search business for the first time and asked questions. The renewed focus on the search category stemmed largely from the emergence of ChatGPT and other AI models.

Google and sorting algorithms

Since the launch of ChatGPT late last year, OpenAI products have been hailed as the future of search and a potential Google killer.

Balaja, former Coinbase CTO, praised ChatGPT as a "historic achievement" that "already outperforms Google in many queries." Paul Buchheit, a partner at Y Combinator and creator of Gmail, announced that Google is "a year or two away from being completely disrupted."

So, will Google follow the Encyclopedia Britannica and the Yellow Pages, gradually being disrupted, or is this just an opportunity for Google to transform?

This article will explore: about the possibility of Google being disrupted.

So, will AI disrupt Google search?

From multiple perspectives, Google Search looks like an invulnerable and irreplaceable product.

Its revenue and finances are very dazzling, and its market share occupies a leading position in the market and is recognized by users.

However, we are discussing "Will AI Disrupt Google Search in the End?" When arguing, you need to first study the past and present of Google search:

If we look back, we may not have seen that Google would become a trillion-dollar company. For example, when Google was founded in 2002, it was questioned:

A New York Times article that year, titled "Google's Toughest Search Is for a Business Model," summed up the market's concerns. Analyst Salomon Smith Barney pointed directly to Wall Street's judgment of Google:

The article goes this way: "As much as people ravel about Google, as a business, I think it takes a lot of effort for Google to catch up with Overture. "

Overture, the creator of the GoTo search engine, isn't Google's only competitor. Companies such as Lycos, Excite, AltaVista and AskJeeves vied for share after the dot.com internet crash around 2000.

Why did Google win later?

Google has better technology. Sergey Brin and Page believe that "the popularity of the results links given by the search" is a sign of the quality of search results. And their perception proved correct.

Based on search, the inspired "PageRank" (PageRank) was developed in 1997 when Larry Page was a Ph.D. student at Stanford University. Page's innovative idea was to copy the entire Internet to a local database and then analyze all the links on the page. Rating the popularity of a web page based on the number and importance of incoming links and anchor text is determined by the collective intelligence of the web to determine which sites are most useful. Algorithms that enable Google to deliver better and more accurate results than its competitors are a testament to Google's technological prowess and have played a big role in Google's growth.

This very sharp technology at the time led to a superior product: that is, Google was not only the most useful search engine, it was also fast and intuitive. And Brin and Page did not waver in the face of commercial temptations and insisted on their advantages.

For example, other search engines allow advertisers to use images in published information, while Google does not. Quite simply, images slow down the loading speed of web pages and reduce the user experience.

Google then launched its own advertising model, which eschewed images and allowed only small text ads. The point is that Brin and Page only provide ad space above and to the sides of the search results. Google's choice represents a major shift compared to search companies like Overture:

That is, Google only provides sponsored search results, B-end customers pay for ranking for certain search terms, and the highest bidder will get the highest position. And Google borrowed this system based on auction thinking.

Of course, Google's success depends not only on better technology, superior products, and a more structured business model; without Eric Schmidt as CEO in 2001, Google might not be the same as it is today.

However, looking back today, these factors are only the foundation. From the perspective of other information innovations we've mentioned, Google's reason for success is simple: it shortens the distance from question to answer and finds a way to monetize it.

Perhaps even Brin and Page would not have imagined that their search engine would have as much profit as it is today. Today's Google Search is not only a large enterprise, but one of the most powerful businesses in the world.

Google search, the economic engine behind the entire Alphabet group, is the organizing principle of Alphabe and the meaning of its existence. Google's other businesses, such as Chrome, Maps and Android, exist largely to augment the power of Google's search, while business plans like Google's biotechnology, self-driving cars and satellites are built on Google's search productivity.

How big is Google Search?

In 2022, Google Search generated $163 billion in revenue, accounting for 57% of Google's total turnover. Google's entire advertising division generated $224 billion, or 79 percent of all revenue.

The question is, is it healthy for a business to rely so much on one product (Google search)? Should a $1.4 trillion business put most of its weight on a single source of revenue?

Historically, search has seemed like an unbreakable business because all internet users around the world need it, but over time, Google has moved to reduce its reliance on search. For example, in 2017, search accounted for 63% of revenue, which has declined in recent years. While search remains Google's most important line of business, the growth of Google's cloud services and YouTube advertising divisions has also helped diversify revenue across the enterprise.

Google's market share is equally impressive. Google has 84% to 91% of the market, other search engines have only single digits, of course, depending on the statistics, this share may have decreased slightly in the past few years, but the amount is not large overall. Google has done a very good job of building other ecological benefits around the search business. For example, whenever a user downloads Chrome or buys an Android phone, Google basically fixes the inevitability of users using its own search engine.

Perhaps, because Google Search for such a service is free for consumers. Therefore, it is easy to forget how much we value them. In 2018, three economists tried to quantify how much consumers value free internet services and asked how much they would have to pay to give them up completely within a year.

In theory, consumers show a high willingness to pay for the digital experience of modern life, for example, surveys show that if you give people $3,600, they will be willing to give up online maps, give them $8400, give up email, give them $17500, and give up using search engines. (Ben Rabbit voiceover: I can't give up how much money I have...) ）

Although the above data only represents the product category in consumer perception, not a specific technology company. However, the above data still represents the importance of Google products in people's lives.

Of course, many people may feel that Google's product has degraded, but it is still the world's preferred search engine, of course, there is a reason why Google has degraded a lot [in products], either to get more revenue or to thwart its competitors.

The most obvious example: search + ad shop increases. Today, users may have to scroll through 42% of the results page to get the results they think they should. Google today, which is completely different from it was around 2000, that is, minimalism and efficiency at that time, has evolved into a page full of sponsored links and full of misinformation and distractions.

The whole search went from being a great work of art to a mess.

Google not only increased the number of ads, but also disguised them, but, remember, users are not fools: if users find out how many pages are consumed by commercial activities, they will choose suppliers with cleaner products.

More spam comes from links generated by Google's internal products for promotion.

For example, Google hotels, flights, and shopping are often put first in relevant queries, and while this may sometimes improve the user experience, it also means that Google competes with the advertisers it serves.

All of this today is a far cry from Brin and Page's original intention of putting consumer needs first and giving up the easy money of ubiquitous advertising.

Google did find ways to make more money from the distance between the question and the answer, but these operations make the journey longer and more tortuous.

Today, when we evaluate the strength of Google Search, we need to point out: Google has a lot of investment in research and development, Google invests tens of billions of dollars in cutting-edge technology every year, and in 2022, it invested 39.5 billion US dollars in research and development, an increase of nearly 8 billion US dollars from 2021.

Much of this investment has been focused on artificial intelligence, which Google has long made a priority, founding Google Brain in 2011 and acquiring startup DeepMind in 2014 for $500 million. There is no doubt that Google has acquired many of the top talents in the entire AI industry.

New contender: ChatGPT's break

Continuing the previous story: Later, when the Lydian king Croesus asks Delphi if he should attack Persia, Delphi replies to him: "You will destroy a great empire" by doing so; Croesus took the reply as good news, seeing it as a sign of Persia's impending decline.

Then the question arises: which empire did the oracle reply to? It says the empire will be destroyed, but it does not say which empire will be destroyed.

The Persian army completely destroyed the Lydian army, and when the once-feared king Croesus was burned at the stake, perhaps he would have a moment to reflect on what the message conveyed to him, and what was of high quality.

Over the years, Google has defeated many rivals head-on, conquering them all. Whether it's Bing, Yahoo or Yandex, or Baidu, DuckDuckGo. Although the revenue of these companies is also good, such as Bing's revenue of $11.6 billion, but in 2021, Yahoo was acquired for $5 billion, Baidu and Yandex are the leading brothers in the region, but from a global macro level, these companies are difficult to compete head-on with Google in the search business.

At the end of last year, ChatGPT, a new competitor, appeared, although this thing looks novel, but its strong energy in AI, so that it quickly accumulated more than 100 million users, and even ranked the fastest growing C-end product ever, surpassing TikTok and Spotify.

We've found that generative AI is a technology that improves the way we create and consume content.

So, can ChatGPT disrupt search?

There are arguments that ChatGPT will disrupt the search industry, for example, Paul Buchcht, a key figure involved in building Google's empire, sees ChatGPT as a threat. Why?

Because in just a few days after ChatGPT's release: Twitter has seen various examples of ChatGPT's ability as a poet, historian, programmer, teacher, and mathematician.

Many people are addicted to ChatGPT and can't help themselves. However, to examine how big a threat ChatGPT is to Google, you need to take a closer look at the advantages and disadvantages of ChatGPT:

Advantages and disadvantages of ChatGPT:

Experientially: Using ChatGPT feels like you enter a request into a smart box and then receive a thoughtful written response that isn't influenced by images, ads, and other links.

From the perspective of pure interface design, ChatGPT people feel that it is to return to a simple and free interface, which is clear, focused, and simple.

In addition to a cleaner interface, ChatGPT can answer some queries more efficiently than Google. Considering the brand new ChatGPT technology and its iterations, it is difficult to fully describe its advantages in this article, however, we can consider the following points:

1. Creating original content

ChatGPT is not simply searching the web and returning a response. Its AI power lies in the fact that it "thinks" and generates content that it thinks will answer your questions. Whether this can be considered the work of a search engine is another matter, but we need to admit that this feature of ChatGPT is useful for generating original content such as code snippets, blog posts, email drafts, or social media posts.

2. Modify the delivery style of iteration information

For example, ChatGPT allows users to control how they want answers to be delivered and whether the generated answers will be modified, depending on the purpose of the answers. For example, writing a trademark application in Old English style sounds interesting, but there is no particular value. But if it is to generate a trademark application for a legal document, it is of practical use.

3. Inquire about background questions.

ChatGPT, for example, is particularly good at answering questions that rely on direct context. For example, if I post an article on ChatGPT, I can ask it questions about the work. For example, did I make any mistakes in the articles I wrote? Is the tone of this article cheerful or sad, can you create an article summary? Of course, while ChatGPT may not be able to do all of these things perfectly, at least for now, Google Search isn't making a difference in this area.

Gptalia Goldberg of Bessemer Venture Partners wrote an article on the future of search, which mentions several features of ChatGPT, including:

Specific non-subjective queries require queries for pattern recognition

NLP-based natural language-based queries, such as translation, summary, sentiment assessment, etc.

Over time, we will find that ChatGPT focuses around specific use cases.

Limitations of ChatGPT

However, like any intelligence, ChatGPT has limitations. First, it's not clear what ChatGPT's search pattern is:

For example, part of ChatGPT's functionality will be search, which can be the primary destination for certain types of search behavior, but search will not necessarily be the primary use case of ChatGPT.

From Google's point of view: whether ChatGPT will be used as a search engine is very important. Because if that's the case, ChatGPT will build its own product to serve this use case and compete head-to-head with Google.

However, if ChatGPT's focus is elsewhere, it may ignore the search business and focus on other parts. As ChatGPT comes out of the lab and gradually develops to the business level, Google will pay close attention to its development direction.

However, if ChatGPT is really a new search engine, there will be more problems to solve. Among them, the most important is the AI's information, which is a limited aggregation over a certain period of time.

(For example, at present, ChatGPT mainly looks up information about 2021, and ChatGPT cannot know who won the midterm elections, does not know whether the World Cup team won or lost, and does not know that Elon Musk is the CEO of Twitter)

Of course, the whole world did not start in 2022, and the previous information also makes sense, but if we review the most popular Google searches in the world, we will find that humans need the latest information, including various hot spots.

Here are the fifteen most popular Google search keywords in the United States:

In what ways will ChatGPT beat Google? It doesn't currently provide maps, current news, but it can give links to websites and has some advantages in translation.

ChatGPT shines at solving complex problems, but what about simple ones.

Another question with ChatGPT is, is it reliable?

It's estimated that 20% of ChatGPT's answers are made up out of thin air, for example, by fabricating a list of academic papers or devising a theorem that doesn't exist.

Of course, this is the mapping given by our current era: when news is devoured by countless fake news, swallowed by pure fabrication, although Google will also give wrong search results, the results of the two are completely different in structure:

Specifically:

Google sometimes presents users with a list of fabricated answers;

And ChatGPT sometimes offers a serious book of nonsense

There are also some minor product issues:

First of all, ChatGPT does not support image search.

Second, it doesn't attempt to tie the request to a user's potential action, with little or no citation.

Case in point: People are often used to attaching a link to reserve a seat in a restaurant recommendation. However, ChatGPT does not show any supporting sources and does not provide any citations.

Also, the cost of ChatGPT is high: while traditional search engines spend $1 billion a year to index the web, AI businesses like ChatGPT are more expensive, which is why OpenAI must not restrict product usage and is looking for further investment.

So, the above shortcomings of ChatGPT, are they permanent? Or short-lived? Can this product be on par with or better than Google where it matters?

Given that Google itself has recently experimented with its own chatbot (which includes current events), ChatGPT is likely to do the same. Over time, we can expect ChatGPT to reduce the probability of a serious, and adding images + sources to support it seems feasible.

Of course, compared to Google, ChatGPT is unlikely to build maps, bookings or shopping anytime soon. While ChatGPT can be integrated with other players, doing so is likely to have an impact on users.

Whether a more restrictive chat interface can combine these business services is unclear. Fundamentally, chat-like search means that users can't click through to new pages, and they can't easily switch back and forth between multiple windows.

How to understand the essence of these scenarios?

This refers to when the user needs a more dimensional experience, that is, when you want to search for what new clothes to buy, or a small supermarket near your dentist's office, this pattern of behavior refers to when you are investigating, not looking for an immediate and definitive answer.

Over time, AI may become personalized enough that perhaps it will surface customization options better than the results of human browsing. In the next few years, more modular interfaces will immediately catch on.

From a cost point of view, in the foreseeable future, the cost of ChatGPT will not survive, and the price may limit its scope of use.

Looking to the future: What will happen?

In 1998, Google founders Sergey Brin and Larry Page received their first venture capital funding. Today, humanity is drowning in the sky of information, and what is needed is insight.

The world of the future will be in the hands of synthesis, who will be able to put the right information together at the right time, think critically about it, and make important choices wisely.

Google's success lies in the fact that it's a special synthesis of the information world, and ChatGPT takes that positioning to the next level (though it still has a lot to improve)

So, in terms of market composition, Google's history and its strength, and the astonishing strength of ChatGPT, where will the future go?

First of all, we can expect Google's reaction and action, how Google will respond to the current "itself will be revolutionized" thing. Google's current CEO, Sundar Pichai, has to make sure that Google doesn't fall behind. Google has been working in AI for more than a decade, and it's time to show the fruits of this labor.

In fact, within Google, management refers to its launch as "Code Red" and has moved quickly to launch and accelerate the corresponding project. In the company's recent investor call, the CEO emphasized the importance of AI to Google, saying that users will be able to interact "soon" with Google's LaMDA (language model for conversational apps) mask, and Google's "Apprentice Bard" chatbot, which is being tested.

The launch of a product like Bard could redefine how users view ChatGPT. Yann LeCun, Meta's head of artificial intelligence, said OpenAI's product is "nothing revolutionary," and while it may be peer blackout, it could also be true.

In addition to showmanship, Google must ensure that it does not cede the bottom market to OpenAI.

One of OpenAI's most shrewd moves by CEO Sam Altman was to actively invest in startups in the AI industry.

(Note: Here are the companies that OpenAI is investing in, so that they can apply OpenAI's model early on.)

Image source: Information

This will not only build relationships with other AI companies in the industry, but will also put OpenAI in a good position: because startups use their models first, OpenAI can hear innovation and relevant consumer demand elsewhere in the market.

Google chose to invest about $400 million in Anthropic.

We may see a resurgence of the "AI and chatbot" craze that dominated the tech world in 2016 and 2017. The success of ChatGPT proves the usefulness of the interface, and at present, several startups that offer chat-based search engines have emerged on the market, You, Andi Search and Perplexity, Neeva, and many more.

Microsoft expects ChatGPT's technology to be introduced to Bing (See: Integrating ChatGPT: Microsoft's Search Wars with Google), while Baidu is developing its own chatbot.

The question is, how will these AI companies make a profit?

There is a basic premise behind the argument that ChatGPT will make Google obsolete:

Based on advertising models, it is impossible or difficult to function in a chat-based world. What could hurt [Google] is the potential shift in the interface, which is to move the search industry away from pay-per-click ads and links.

Perhaps this is the fact that the innovator's dilemma – that is, the response to competitive threats – can stifle its own core business. In a new interface, it may take time to fully replicate the complexity of Google Ads and monetization links, while the different space limitations of the chat interface are likely to reduce the total advertising volume.

However, the chat interface does not seem to be completely at odds with the complex advertising model. There is room to run ads, such as introducing a pay-per-click system into conversational interfaces. In this area, chatbots have even more obvious advantages, because if the direct conversation feels like talking to a real person, it will even have a higher business conversion rate.

In addition, users solving more complex queries from the chatbot help area may provide additional context that improves targeting. For example, let's have a "wolf of Wall Street" version of ChatGPT to trick consumers into making a purchase.

ChatGPT has gone the subscription route and is testing a premium service for $20 a month, and while it's a savvy way to monetize its superusers, it's not aimed at a mass-market audience.

Of course, ChatGPT for this price, or similar AI, would be extremely attractive to enterprise audiences, even if it is more expensive: vertical chatbots for legal, medical, engineering, software development, sales, real estate, and other industries would be very valuable. While ChatGPT does a great job on a range of topics, providing more upfront background and training allows for iterating its utility to a higher level.

While the chat interface is currently meeting some needs, we are likely to see further innovation around the search interface in the coming years. By leveraging general intelligence, we'll see new vertical search engines combined with apps like YouTube, Pinterest, and Reddit.

And the voice assistants of the future may become more useful than they can't understand even basic compound problems.

We can call our word processor and let him help us find the right citation, find the latest financial results in our spreadsheet, or find the right words in our email inbox...

Writer Neil Gaiman argues:

"Google can give you 100,000 answers, but a librarian can give you the most accurate answers."

Over the past two decades, Google has won by providing the shortest path between questions and answers, and through massive web resources, advanced sorting algorithms, has become the king of search, which seems invincible.

But the recent success of ChatGPT shows that disrupting Google isn't hard to do. OpenAI's products transform Google's ocean of data into clear answers, making it easier to answer dimensions.

ChatGPT = Librarian of the Information Age, which can harness vast amounts of human knowledge to provide a definitive answer (even if it currently goes wrong)

ChatGPT's talent and speed in refining, generating, and condensing text is undoubtedly particularly valuable in this vast information age.

Bibliography:

1.https://www.generalist.com/briefing/all-the-answers #

2.https://baike.baidu.com/item/%E8%B0%B7%E6%AD%8C%E6%90%9C%E7%B4%A2%E7%AE%97%E6%B3%95/6543372

3.OpenAI Dangles Perks and Early Access to Win Investments in AI Startups — The Information(https://www.theinformation.com/articles/openai-bolsters-ties-to-other-ai-startups-with-venture-investments?rc=ypdxx3)