Alphabet ( GOOG 0.95% ) ( GOOGL 1.01% ) The company has established a vast business by offering users valuable search outcomes. Its search engine plays a crucial role in the success of businesses, leading companies to frequently employ specialists in search engine optimization to guarantee a high ranking in search results. Securing the top spot can have a considerable impact on the amount of traffic and income a business attracts.
Chatbots and artificial intelligence (AI) have the potential to disrupt this situation significantly. For example, if users start relying more on asking a personal assistant or chatbot for information instead of using Google Search, it could affect the amount of traffic directed to the well-known search engine.
Technology firms have been putting resources into creating their own chatbots, with perhaps none more well-known than OpenAI’s ChatGPT. OpenAI has just revealed intentions to introduce a new product, which poses a significant challenge to Google Search. This new tool is an actual search engine named SearchGPT.
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What does SearchGPT refer to?
OpenAI revealed in July that they are currently experimenting with SearchGPT, an AI-powered tool designed to assist individuals in locating information, much like their chatbot ChatGPT. The major distinction is that, unlike the chatbot, which provides users with only one outcome, SearchGPT allows users to access multiple results and references.
The company has stated that SearchGPT will utilize the power of their AI models along with data from the internet to provide quick and relevant answers supported by clear sources. The tool is currently being tested, and individuals interested in trying out the prototype need to join a waitlist. As of now, there is no specific timeframe for when it will be officially accessible to the general public.
The potential impact of SearchGPT on Google could be significant.
In the past, Google had competitors in the search engine market, but SearchGPT stands out as unique. ChatGPT has gained significant popularity with over 200 million monthly users, which could make SearchGPT a strong rival to Google Search.
Google is facing additional challenges due to a recent court decision that determined Alphabet holds an unlawful monopoly in the search engine industry. Alphabet has been compensating companies with significant sums of money to secure their search engine as the default option on mobile phones and web browsers. The court concluded that this practice by the company has hindered fair competition.
The potential penalties or repercussions are uncertain, but the decision could have a notable effect on Google Search’s operations. This may worsen the difficulties the company could encounter from SearchGPT in the upcoming times.
Google Search remains Alphabet’s main source of revenue.
The significance of these advancements cannot be emphasized enough. Alphabet generated close to $85 billion in revenue. in the most recent period In the quarter that concluded in June, around $49 billion of the revenue came from the “Google Search & Other” category. When considering earnings from Google Network and YouTube advertisements, the total advertising revenue for Google in that period was $64.6 billion.
Alphabet faces significant consequences if it no longer maintains its leading position in the search market. A large portion of its revenue comes from advertisements associated with Google Search. If the recent decision alters its business practices, it could potentially make it simpler for a rival like SearchGPT to significantly reduce the amount of online traffic directed towards Google Search and consequently impact the revenue that Alphabet earns.
Is it advisable for investors to steer clear of Alphabet’s stock?
Investors should not underestimate the risk that SearchGPT and artificial intelligence (AI) present to Alphabet’s business. Alphabet could face significant consequences from AI as it heavily relies on the search queries and inquiries made on its search engine.
Alphabet has been focusing on the creation of their chatbot Gemini, and its performance may play a crucial role in Alphabet’s ability to counter the new challenge. However, it is currently too soon to predict the potential influence of SearchGPT.
Alphabet faces a risk due to its heavy reliance on revenue generated from search. A decrease in search-related income could have a substantial effect on its current valuation of approximately $2 trillion.
I would need to observe the performance and reception of SearchGPT as well as the consequences of the recent antitrust ruling on Google Search before deciding to invest in Alphabet’s business. It might be wise for investors to hold off on making any decisions until there is more clarity on these matters. tech stock With those two unresolved matters, investors may face excessive risk and uncertainty.
