Bing's Growing Threat to Google's Search Dominance
The New York Times report published over the weekend highlights the increasing challenges Google's $162-billion-a-year search engine business faced from Bing. Bing's prominence has grown recently after integrating the artificial intelligence technology behind ChatGPT.
Google's Potential Loss of Samsung Contract
According to internal messages cited in the report, Google's reaction to the potential threat was described as "panic" since the company makes an estimated $3 billion in annual revenue from the Samsung contract.
Apple Contract Renewal Looms for Google
As mentioned in the report, an additional $20 billion is connected to a similar Apple contract that is due for renewal this year.
Google's Response and Samsung's Silence
In response to Reuters, Google stated that it is working to introduce new AI-powered features to search without commenting on its relationship with Samsung. The South Korean consumer electronics giant did not respond to a request for comment.
Wall Street Fears Google Losing AI Race
Google has dominated the search market with over 80% share for decades. However, Wall Street is concerned that the company may fall behind Microsoft in the rapidly advancing AI race.
Alphabet's Market Cap Takes a Hit
Alphabet lost $100 billion in value on February 8th when its new chatbot, Bard, shared inaccurate information in a promotional video, and a company event failed to impress. On Monday, the stock dropped to $104.90, erasing nearly $50 billion from Alphabet's market capitalization, while Microsoft outperformed the broader market with a 1% rise.
Analyst Insights on Google's Search Monopoly
James Cordwell, an analyst at Atlantic Equities, said, "Investors worry Google has become a lazy monopolist in search, and the developments of the last couple of months have served as a wake-up call." Cordwell also noted potential costs associated with making Google Search more competitive than AI-powered Bing could be a cause for concern.