ChatGPT vs. Google: Will Google’s profits take a hit?
Updated July 20, 2023.
ChatGPT has pushed Google out of their comfort zone by ushering in what Microsoft's CEO, Satya Nadella, describes as “a new day for search.” While Bing's search business generates around $11 billion annually—a modest figure compared to Google—Nadella suggests that every user Bing acquires from Google shrinks Google's business and expands their own.
The pressing question is whether ChatGPT, with its innovative approach, can significantly diminish Google's revenue due to these industry changes.
Bard: Google’s response to ChatGPT
Launched six months ago, Google's Bard is poised to rival ChatGPT. Despite potential early setbacks, Google is committed to improving Bard to exceed ChatGPT's capabilities. Therefore, concerns about Google's competitiveness should diminish as Bard catches up.
While Bard and ChatGPT operate at similar levels, the competition is far from over. ChatGPT may draw away some of Google's search queries, but Google's strategy is distinct—it isn't creating a ChatGPT clone. Instead, it's redefining the search experience by integrating Bard into search and over 30 other products. This will enhance Bard's capabilities and optimize the current search paradigm.
As showcased at the recent Google I/O, Bard's advanced features enable users to ask complex questions. Bard not only responds but also incorporates search results from across the web for a comprehensive answer. For instance, inquiring about a baby stroller for a specific user profile yields contextually accurate results and even related products.
That’s not all. Users can export answers from Bard into Google Docs or Sheets, and it also collaborates with other platforms to generate images and videos. Such features not only enhance the search experience but also augment search results.
With Bard as part of Google Search, it seems likely Google can keep its search volume. Given Bard's rich features, it potentially offers a superior experience compared to ChatGPT. So, Bard's integration promises to further strengthen Google's search capabilities.
» Discover whether ChatGPT poses a real threat to Google.
Introducing a new approach to search
To discuss the potential impact of platforms like ChatGPT on Google's ad revenues, we first need to understand a very important concept that we call "query classes" at Entail. Most companies, like Semrush, define query classes as transactional, commercial, informational, and navigational.
Not all search types are relevant for a chat-like experience such as ChatGPT. For instance, a search for "Shopify" typically yields the brand's website, social profiles, and articles about it. This kind of search doesn't require a complex answer. Transactional searches such as "What are the best Shopify apps?" may also not be ideal for ChatGPT due to its subjective nature.
Chat-like experiences are better suited for complex queries involving multiple factors, such as "What car should I rent in Athens for a family of five with windsurfing equipment?" Here, ChatGPT can compile various types of information to produce a comprehensive response.
Through this, we can see that platforms like ChatGPT don't replace traditional searches but introduce a more conversational type of search—a combination of chat and search. This development doesn’t change the existing types of searches but adds a new dimension to them.
Google’s search volume will remain mostly unaffected
While it's possible to consolidate multiple searches into a single, more complex one, this doesn't significantly impact Google's overall search volume. Short-tail searches constitute the majority of search volume, while long-tail searches, though diverse, account for a lesser volume.
AI chat platforms like ChatGPT may capture some of these complex, long-tail searches that previously involved multiple simpler queries. However, this represents a small fraction of total searches. Therefore, it's unlikely that Google will see a significant reduction in search volume due to these platforms. Instead, these tools present a new category of search, accommodating queries that were previously unfeasible.
Google isn't going to lose searches due to AI chat alternatives. In fact, it will probably respond with something better.
In addition, Google isn't poised to lose searches due to AI chat alternatives. In fact, it will likely respond with a tool potentially superior to existing options like ChatGPT.
» Learn how ChatGPT is rewriting the rules of content marketing.
Bard presents plenty of new monetization opportunities
Google's integration of Bard into its search system creates additional transactional opportunities and avenues for sales and traffic generation for brands. Furthermore, it allows for product embedding in Bard's responses, creating recommendations within the answers. This approach aligns with Google's revenue model, suggesting that new monetization opportunities will arise within this innovative chat-search experience.
A user looking for the cheapest flight from New York to London could ask Bard, bypassing the need for travel websites like Expedia. Google could even facilitate the ticket purchase directly, further monetizing the interaction. This indicates new potential revenue streams, possibly making third-party platforms less relevant.
Google’s future looks brighter than ever
Although ChatGPT has disrupted the status quo, this disruption has pushed Google, which may have otherwise rested on its laurels, to innovate. The emergence of OpenAI has catalyzed a shift that will impact numerous businesses, including substantial websites like Stack Overflow. It will also enhance user experience and data accessibility.
Given the steady growth of the search category over the past two decades, with Google dominating as a near-monopoly, we anticipate that Google will only grow stronger. The integration of Bard allows them to handle more search queries and introduces additional conversion and monetization features.