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Apple's AI-Powered Safari Revamp Could Undermine Google’s Dominance
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(Apple’s strategy to transform its Safari web browser by incorporating AI-driven search features deals a significant setback to Google, causing its stock prices to drop sharply. This shift has the potential to undermine Google’s core search advertising revenue stream.)
Apple executive Eddy Cue provided evidence in an antitrust lawsuit targeting Alphabet on Wednesday, stating that Apple was "considering modifications" for Safari, according to someone with knowledge of the situation reported by vtrik.
Cue also mentioned that Apple plans to introduce AI-powered search providers such as OpenAI and Perplexity AI as additional search choices in the coming days, according to Bloomberg.
The news caused Alphabet’s share price to drop by 7.6%, erasing over $150 billion from its market capitalization. Similarly, Apple’s stock declined following Cue’s statement that searches on Safari decreased for the first time last month as users shifted towards using AI tools instead.
The commentary indicated that a significant change in search is imminent and not decades away, posing a threat to Google's previously unassailable position in the search industry.
Certainly, Google isn’t without defenses. To keep its vast user base from drifting towards alternative AI systems, it has rolled out an “AI mode” on its search platform.
The firm aims to secure a deal with Apple by mid-year to integrate its Gemini AI technology into upcoming smartphones, according to CEO Sundar Pichai’s statement during an antitrust hearing last month.
Google serves as the default search engine in Apple's browser, a highly prized placement that reportedly costs Google around $20 billion annually from Apple, equating to approximately 36% of its total search ad revenue sourced via Safari, according to analyst estimates.
"D.A. Davidson analyst Gil Luria stated that the loss of exclusivity at Apple could lead to extremely serious outcomes for Google, regardless of whether additional actions are taken or not," he explained.
" numerous advertisers allocate their entire search advertising budget to Google due to its near-monopoly status with nearly 90% market share. Should alternative options for searches become feasible, these advertisers might redirect significant portions of their spending away from Google," stated Luria.
(Jody Godoy reported from Washington, and Arsheeya Bajwa and Aditya Soni contributed from Bengaluru; editing by Sayantani Ghosh, Anil D'Silva, and Arun Koyyur)
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