Remember when AOL seemed like the Goliath of the internet in the '90s? Well, Goliath eventually fell.
Which brings me to Google, the current Goliath of the internet.
Advertising giants are in good financial shape right now, but there are a number of challenges ahead, including advertiser dissatisfaction, a legal minefield, a shift in search ad budgets to new platforms and retail sites, and everyone's favorite existential threat: AI. facing such a threat.
The question is not whether Google will collapse, but whether that time is near. If so, what will ultimately cause it to collapse?
Advertiser dissatisfaction won't stop Google, but it's damaging.
Recent headlines illustrate the challenges for Google's advertisers.
It was revealed that the company manipulated search ad auctions to squeeze more money from advertisers without their knowledge.
A scathing report from independent research firm Adalytics has recently shed light on Google's problematic Search Partner Network (SPN). Adalytics found that brands buying Google search ads can sometimes be found on pornographic or sanctioned sites. Google responded by allowing buyers to opt out of her SPN for all campaign types, including its AI-driven buying tool, P-Max. It was an admission of guilt.
Finally, there is the never-ending agonizing over the deprecation of third-party cookies. As Machiavelli famously said, it is better to be feared than loved. Most advertisers have viewed Google as a necessary evil. But once advertisers begin to believe that the company's plan to phase out third-party cookies from Chrome is actually hurting their business, they may no longer love it or fear it. may disappear.
Antitrust laws slow down Google
Google's sweeping control over advertisers and publishers, a source of industry concern, is increasingly under threat.
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In a lawsuit brought by game maker Epic, a jury recently found that Google had turned the Google Play app store and Google Play Billing service into illegal monopolies.
Interestingly, Google's only real app store rival, Apple, won a similar lawsuit. One of the major differences between the two lawsuits is that Google apparently offered sweet deals to smartphone manufacturers and certain app developers, such as zero fees for Spotify and only 10% fees for Netflix. That's what happened.
But from a legal perspective, the app store isn't just Google's responsibility. The company faces two additional antitrust lawsuits.
Consider the Justice Department's upcoming ad tech monopoly trial. One potential outcome of this lawsuit could be that Google is forced to separate parts of its advertising technology stack. It's not ideal, but it also doesn't hurt the company. In any case, ad tech is somewhat of a loss leader for Google.
Next was the search monopoly case, with arguments concluded in November. Search ads remain the heart of Google's business.
We don't know what the outcome of the search monopoly case will be, but one possibility is that Google will not be allowed to be the default search engine on iOS devices. Losing Apple's lucrative consumer base could hurt Google.
And Google's search problems could worsen if retailers and TikTok continue to steal search market share.
The straw that could break Google: AI
But Google's biggest competitive threat is AI, which could fundamentally change how consumers access and use information.
The company clearly understands the existential crisis. In a blog post announcing his Gemini, Google's AI-powered search solution, CEO Sundar Pichai wrote: I believe that the AI changes we are seeing now will be the most profound in our lifetimes, far greater than the transition to mobile and the web. before that.
do you understand? Pichai argues that AI is a bigger problem than the digital revolution that created Google in the first place.
The problem is that Google has already delayed Gemini. And they're crowding the market with confusing AI brands like Gemini, Bard, and DeepMind.
Meanwhile, OpenAI took an early lead with ChatGPT, which became the fastest-growing consumer application in history. To make matters worse, a bizarre power struggle at OpenAI has given Google's rival Microsoft even more control over ChatGPT.
And more AI search tools are entering the market.
It's been more than a decade since Google entered the search wars in earnest. But between the rise of TikTok, the growth of retail search (Amazon, Walmart, Target, etc.), and the AI revolution, a new search war has already begun. And Google is losing ground.
Yes, Google controls important markets and has a lot of talent and money. But at the same time, we can get distracted by the drama of the present when we should be most focused on building for the future. And you need to build quickly.
Google is currently at about the same stage that AOL was when Google founders Sergey Brin and Larry Page were building search engines in their garages. That means the next Goliath may already be ready to take over.
Data-Driven Thinking is written by members of the media community and contains fresh ideas about the digital revolution in media.
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