Well, it’s official: Microsoft is gunning for Google. They’re building ChatGPT-like capabilities into "the new Bing" and explicitly stating they can steal share from Google. So is this the end of Google? Are they doomed? Or will their own AI based enhancements, such as Bard, be enough to beat back the hordes?
No matter what happens in the coming weeks and months, I think this is the end of Google. Oh, their business could easily survive. But it’s the end of Google as we know it. It’s the end of search as we know it. And, if your marketing has been built around paid and organic search, around retargeting based on the traffic that search brings your way, then we’re seeing the end of the way you connect with customers too.
And that’s the point of this week’s episode of Thinks Out Loud. What does "the end of Google" as we know it mean for your business? What do you need to do to be ready for a new world order? And, most importantly, how can you effectively connect with customers if you the way search and Google works ends?
Want to learn more? Then give a listen, review the transcript, and check out all today’s show notes. Enjoy!
The End of Google? (Thinks Out Loud Episode 372) — Headlines and Show Notes
Show Notes and Links
- Is ChatGPT Going to Steal Your Job? (Thinks Out Loud Episode 371)
- AI Won’t Steal Your Job: Smart People Who Put AI to Work Will (Thinks Out Loud Episode 208)
- Will ChatGPT Kill Google? (Thinks Out Loud Episode 367)
- ChatGPT – Wikipedia
- Microsoft will offer ChatGPT tech for companies to customize: source
- Google AI updates: Bard and new AI features in Search
- Bard: Google unveils its ChatGPT rival | CNN Business
- Google Bard AI event live blog — see how Google will challenge ChatGPT | Tom’s Guide
- I Tried Microsoft’s New AI-Powered Bing. Search Will Never Be the Same. – WSJ
- Reinventing search with a new AI-powered Microsoft Bing and Edge, your copilot for the web – The Official Microsoft Blog
- Microsoft CEO Satya Nadella calls AI search biggest thing in 15 years
- Microsoft earnings Powerpoint Slides
- Why Amazon Is Going to Launch a Search Engine (Thinks Out Loud Episode 345)
- How To Run Your Business As If Google Didn’t Exist (Thinks Out Loud Episode 298)
- What We Learned from Big Tech’s Earnings Q1 2023 (Thinks Out Loud Episode 373)
- Big Trends: The Early Innings of AI in Marketing (Thinks Out Loud Episode 374)
- Big Trends: Does Marketing Have a Future? (Thinks Out Loud Episode 375)
- How to Escape Big Tech’s Web (Thinks Out Loud Episode 395)
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Transcript: The End of Google? (Thinks Out Loud Episode 372)
Well, hello again everyone. Welcome back to Thinks Out Loud, your source for all the digital expertise your business needs. Oh my gosh. My name is Tim Peter, I think we have a really cool show for you. I really appreciate you tuning in. But my goodness, this show is being recorded late this week. This is probably the fastest we will ever get an episode out.
We’re releasing on a Wednesday. We try to release on a Tuesday but this was recorded Wednesday morning and will be released Wednesday morning, because there’s a lot going on that really blew up the initial plans we’d had for this week’s show.
Generative AI Grows Up
So anyway, I don’t know if you’ve heard, there’s a lot going on with Generative AI. I’ve been talking about this. I talked about it last week when I asked "Will ChatGPT take your job?" I’ve asked, "Will ChatGPT kill Google?" And some folks have certainly said that it will. I don’t know that it will. But if this is in fact the end of Google, this is how it ends. And I want to explain what I mean by that.
More importantly, I want to explain why that matters to you, why that matters to your business, why that matters to your business’s future. Nothing we’re going to talk about today has all that much to do with technology. It has a lot to do with the future of your business. So let’s dive into some background and just get everybody up to speed on what’s been happening.
ChatGPT Comes to Search
As I’ve talked about here on the show before, Microsoft has invested heavily in ChatGPT which is a generative AI technology, an AI that can theoretically generate text and images and things along those lines. ChatGPT is focused on text, but generative AI more broadly can focus on other kinds of creative materials.
Microsoft has invested very heavily in the creator of ChatGPT, a group called OpenAI. And they incorporated it yesterday into something that they’re calling "the new Bing." Microsoft literally just showed this off yesterday; they made it publicly available yesterday. They also planned to give companies the ability to build on its capabilities for themselves.
Now, Google is not resigned to a fate where it gets shoved aside. They’ve also invested heavily in developing their own large language models, which are these machine learning algorithms that underlie these new technologies. They literally just previewed a competitor called Bard today, which is built on their LaMDA large language model, and showed all of the different ways that they are incorporating AI into search.
They want to be very clear that Microsoft isn’t the only company that can incorporate AI into search. So this is something where we’re seeing competition in search. We’re going to see competition in search. In a way that we haven’t in a very, very, very long time. Microsoft has been explicit about this.
He said, Satya Nadella, Microsoft’s CEO, in an interview with the Wall Street Journal yesterday said "The last time I checked, search was the most profitable category there is on planet. So all I need is a few more users and someone else I am competing with has to keep all of their gross, all of their users, and all of their gross margin. I’m looking forward to that."
Big Tech Must Respond
That is as big a shot across Google’s bow as I’ve seen in a long time. As Satya Nadella implies there, Google makes most of its money from ads. And I don’t know if you’ve checked out their recent earnings — and I’ll have a full update on the AGFAM, Big Tech’s earnings in the next week or so — but overall, Google’s earnings weren’t great.
Microsoft doesn’t have that same problem as Google. They don’t need to make as much money on ads as Google does. Yes, they have ad revenue from Bing, and yes, they have ad revenue from LinkedIn. But each of those are a piece of a piece of their overall revenue and earnings. Microsoft’s value prop here is intriguing at the least.
This also has broad implications for Facebook and Amazon and Apple. They all are going to be feeling pressure here. I’ve thought for a while that Amazon is going to launch its own search engine. I think the launch of the new Bing and Google incorporating Bard, its AI tool, into its search results makes it more likely [for Amazon to respond] if for no other reason than they want access to data. I’d argue that it’s becoming darned near existential for these companies if they’re going to remain relevant.
Is This the End of Google?
I also don’t know if Google will win or if Microsoft will win or if Apple will win or if Amazon will win. I don’t think anyone can predict that at the moment. Remember, we are talking about a tool that has upended the established order to at least some degree. And it’s a tool whose lifespan we can still measure in weeks. This was released at the end of November of 2022. This is not a mature product or a mature category. So there’s going to be a lot of change. And that’s interesting.
So I don’t know if this is how Google ends, but if they stumble, if this is what comes to pass, this is the way that Google ends. Because they don’t search to be the best, but they need to keep customers coming to them. Their customers can switch easily. And if Google can’t monetize that traffic, that’s a huge problem for them.
One thing I do want to point out is that no matter who wins, I’m still talking about the AGFAM — Apple, Google, Facebook, Amazon, Microsoft. I’m still talking about Big Tech. Developing these approaches takes immense capital and especially access to massive volumes of data. Yes, Microsoft is going to make it available to third parties. Google announced today that they are going to make their AI available to third parties. And we’re seeing lots of evidence that AI is dramatically improving the productivity of software programmers. For instance, Ark Invest has their 2023 Big Ideas report, and they’re showing that that’s what we’re seeing, that it’s getting cheaper. Again, ARC Invest sees the cost of developing AI falling by 70% annually through 2030.
That said, today it’s still expensive. Even at a 70% decline annually, you’re looking at a relative cost per unit of $40,000 in 2024, and about $12,000 in 2025. So it gets affordable for many enterprises relatively quickly, but not affordable enough for everybody.
Availability of developers will also incur costs and time to market. And just as I’d mentioned last week when I talked about why AI probably won’t take your job, Ark Invest also calls out the challenge of acquiring quality training data. Data is going to be a gating factor for people who use these technologies, who try to build on these technologies for a time to come.
Trading One Gatekeeper for Another
What this suggests to me is that at least for the next couple of years, ChatGPT level capabilities will remain concentrated among the biggest players. You know, OpenAI started as a research project backed by LinkedIn co-founder Reid Hoffman, PayPal, co-founder Peter Teal, Elon Musk, Infosys, the IT services giant, and, as I’ve mentioned, Microsoft. So as much as we love the proverbial story of "two kids in a garage" who come in and overturn entrenched market leaders, at the moment, the threat is coming from inside the house.
We are trading one Big Tech player potentially for another Big Tech player. If this is how Google ends, someone who looks just like them is stepping into their place. And this is where I want to bring it back to you and why it matters to your business.
Because as we know, gatekeepers gonna gate, that’s what they do. An AI-based search engine might be worse for your business. Think about how Google makes money today. They make money based on ads that appear in search results that you pay for every time somebody clicks. Now those clicks generate lots of revenue for lots of people. Not just for Google, but for all of the businesses who are paying for those clicks.
And one of the things that I’m concerned about that the changes that tools like the "new Bing" introduce is that customers may increasingly get answers to their questions without needing to click. They might not need to come to your site or download your app in the same ways that they do today.
Again, Google makes a lot of its money on those clicks. Microsoft said, Satya said out loud that he doesn’t need to steal all of that; he just needs to steal enough to hurt them.
And I can easily see a future where we’re paying to place ads alongside generated "answers" — and I’m putting "answers" on in air quotes here — on AI powered search engines instead of being the source of the answer as we are today. And only getting clicks, only getting traffic, only getting business if we can demonstrate value in addition to the answer. We’ve been using the answer to pull people towards us. We’ve been using content to provide the answer, to pull people towards us. And if they’re getting the answer without having to come to us, it makes it harder to acquire traffic at any price.
The End of Search as We Know It
It increasingly looks to me that we’re certainly looking at the end of Google as we know it. We’re looking at the end of search as we know it. Search is going to turn into a very, very different category quickly.
Now, I have said many times on the show and I would re be remiss if I didn’t say it right now, the old Bill Gates quote that "we always overestimate the change in the next two years and underestimate the change in the next 10." So this might take two years or three years to play itself out.
What I can say is we’re seeing more innovation in search in the last week, in the last 48 hours than I think we’ve seen in the last 48 weeks, So we may be, you know, the problem with that quote of, "we always overestimate the change we see in the next two years" is… two years from when? When do you start the clock? It’s entirely possible that two years started one year and 11 months ago. So we might be seeing some pretty significant change here relatively quickly or it may take a year or two to play out.
What Does the End of Google Mean For You?
So, here’s the question I have for you. Does it matter to your business who wins? Does it matter to your business if Google or Bing or Amazon or someone else altogether wins? Especially if they’re increasing the roadblocks and tolls between you and your customer. You bet it does. Does it matter if the customer experience we’ve known for years thesis to exist? Absolutely.
And that’s the point I want to bring you towards as we have this discussion. A few years ago, August of 2020, I did an episode about how to run your business as if Google didn’t exist. We may be reaching that reality sooner rather than later. Don’t get me wrong, I’m not saying Google’s going to trip and fall and be out of business in a year’s time. I’m saying that if you depend upon Google for a significant source of your traffic and a significant source of your revenue, you may be in a world where they’re providing less of that over time than they have. That’s going to change the way you do your marketing. That’s going to change the way you reach your customers.
How to Run Your Business As If Google Didn’t Exist
So how do you run your business as if Google didn’t exist? Well, I think you need to start thinking about it that way because even if this isn’t the end of Google as we know them, can you afford to take the risk? Aren’t you better off being ready no matter which way this goes down? I would argue very much yes.
Because here’s the thing, if they win or they lose, if search changes dramatically or it doesn’t, you still benefit. Because the way you run your business as if Google doesn’t exist is to look at how to connect with customers directly more effectively.
My friend Mark Schaffer has a new book called Belonging to the Brand that’s incredibly worth reading that speaks about this in a lot of detail. I have a book on how you compete against Big Tech that’s coming out in a couple months too, and speaks to the same idea. What we have in common is recognition of the fact that you must build direct connections with your customers.
Why do they care about you? What do you offer that’s distinctly different and meaningful in their lives? How are you connecting with them beyond search? Are you connecting with them via email? Or text? Or emerging social networks like Discord? Or in person in a way that they appreciate and that they enjoy? Do you provide them with a customer experience that they want to share with their friends and their family and their fans and their followers? Do they want to participate in the creation and curation of a positive brand story on your behalf? That’s where you need to be thinking. That’s how you need to think about your relationship with your customers as well as your relationship with big. Because if you’re dependent upon a gatekeeper, no matter who it is, you are allowing them to control your access to customers.
Conclusion: The End of Google?
Whether this is the end of Google or not, it’s past time to think about the start of something new: a deeper, more meaningful connection with your customers that doesn’t depend on gatekeepers. One that reduces the role those gatekeepers play for your brand and your business. Don’t worry about whether ChatGPT or "the new Bing" or Bard or something else altogether brings about the end of Google.
I’d flip this whole idea on its head, instead, and make the end of Google not something you fear. But a goal you actively pursue.
Show Closing and Credits
Now looking at the clock on the wall, we are out of time for this week. I want to remind you that you can find the show notes for today’s episode, as well as an archive of all past episodes by going to tim peter.com/podcasts. Again, that’s tim peter.com/podcasts. Just look for episode 370.
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