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From a certain vantage point, Google looks like it’s being bullied into accepting the ascendance of AI.
After all, why mess with a trillion-dollar ads business that acts like a pillar of the consumer internet, a foundation for knowledge seeking, and a perpetual attention machine? The answer supplied by bears is because Google and Alphabet (GOOG) have to. Adapt or die.
The flood of AI announcements at the company’s I/O developer conference this week didn’t really resolve that question as much as blow it up.
It doesn’t matter as much what is prompting Google to overhaul its search products. What’s important is that people continue to use Google products — even if that means overhauling legacy search engines into AI agents and chatbots. If investors worry Google is cannibalizing its most treasured asset to fend off OpenAI and a new wave of rivals, Google’s response seems to be: So be it. And by the way, we are the new wave. Enjoy your AI overview.
Company executives use different keywords and metaphors, of course. What are tech conferences if not human prompt engineering?
“We believe AI will be the most powerful engine for discovery that the web has ever seen,” said Liz Reid, the leader of Google’s search team, during the keynote presentation. Reid showcased Google’s new AI Mode, a dedicated chatbot-style search option that’s now built into the Google Search page alongside tabs like Images, Videos, and News.
Instead of fetching a specific piece of information or presenting a series of hyperlinks, AI Mode offers a back-and-forth conversation, a synthesis of detailed research, and help with shopping and logistics.
For Reid and the executive team, integrating AI into the search experience isn’t a break from search but an evolution of it.
What’s left unresolved is how disruptive that may be for the businesses that rely on legacy Google search to send people their way. Or people who are Googling to explore and find questions, rather than simply answer them. For now, at least, the management team has touted that when people use AI Overviews, they’re happier with the results and end up searching more often.
As my colleague Dan Howley, who reported from the conference, put it, “This is Google’s attempt to try and reestablish itself.” A more intelligent search experience, bringing in additional features, is one that can better compete with the other AI companies that aim to overtake Google as the central interface to the web.
Bullish analysts see Google’s impressive slate of AI developments and search updates as an end to its “catch-up” period after the company, and much of Big Tech, was initially caught by surprise during ChatGPT’s splashy rollout in 2022.
Now Google is going on the offensive.
“We see this as Google’s ‘Reels moment’, taking on a growing and well-funded competitor in Open AI by integrating a directly competitive product,” said Bank of America research analysts Justin Post and Nitin Bansal in a note on Wednesday.
Whether Google will be able to squeeze similar levels of attention and cash from a new AI-centered regime remains an open question. The company’s leaders are signaling they are confident it can. And if search, as we know it, is on the way out, Google is working to manage the exit on its own terms. Until there are viable search alternatives, Google has a captive audience to workshop its AI strategy, one overview at a time.
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Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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