Google’s time under the sun as the dominating search engine platform might be coming to an end, courtesy of ChatGPT.
Ask the AI a question, and it spits out an answer to you in seconds, but with Google, you have to “browse” and work to find the knowledge. Who wants to do that? This rotation in consumers’ search preferences could pose a big problem for Google, which generates nearly three-quarters of its overall revenue from its mainstay ad business.
Alphabet shares have slumped 7.7% this year because of those concerns, making it the third worst performer out of its Magnificent Seven peers and lagging behind the S&P 500’s 1.6% gain. Reddit shares, too, have been hurt by the same worries, down 28%.
If the search-engine giant doesn’t get a grip over the situation, it risks joining AltaVista, Ask Jeeves, and Dogpile in the graveyard or becoming as obsolete as Bing. Or even <shudder> Lycos.
In a quest to shore up how real the threat is, I avoided using Google for a week and used only ChatGPT. I picked four instances that best illustrate daily queries and compiled the results below in screenshots. We didn’t include Gemini, as it is owned by Google and wouldn’t be a fair comparison. Keep in mind, results may vary for everyone.
Test 1: Food recipes
It was my turn to cook dinner on Tuesday, so I decided to make an easy chana masala dish, you know, the one you likely buy from Trader Joe’s. I prefer cooking recipes based off a trusted food blogger, and somehow the food tastes exactly like my mom’s. But the problem with those websites is that they almost always have a 1,000-word summary of where the dish comes from. I don’t need all that.
So I prompted ChatGPT to give me that specific blogger’s chana masala recipe. It all looked fine at first, but then I looked closely and saw it was missing a few key ingredients, like cloves and cinnamon sticks.
It was also missing some of the cooking steps, such as not instructing me to add mango powder at the end of the process. It’s possible that after some prodding I would have been able to get the exact recipe, but at that point it’s just better to google it.
Winner: Google
Test 2: CPI day roundup
The best part about CPI reports is rarely the numbers. It’s more about how investors are interpreting the data. Major news publications do a great job of detailing that through select quotes published typically in the morning. Searching for that on Google would have easily taken me from CNBC to WSJ to the Barron’s website.
In this instance, ChatGPT easily takes the cake. It not only summed up the key numbers but also presented me quotes from investors, along with showing me the consensus view on the upcoming Federal Reserve policy.
Winner: ChatGPT
Test 3: Music album research
This week, I finally listened to an album from one of my favorite bands, Bastille, that was released late last year. The band’s decision to name it “&” (Ampersand) piqued my curiosity, so I asked ChatGPT why that name specifically. Surprisingly, it gave me a pretty good answer on the reason.
However, when I googled the same thing, I came across an interview by the lead singer in Rolling Stone, where he explained the decision process behind it. As a fan, I am more interested in reading what the artist had to say, but ChatGPT gave me no quotes from him in its answer.
It’s hard to imagine a world in which an artist would be giving an interview to ChatGPT. That might be good news for media companies that have come under pressure from losing market share to AI. These days they’re trying to pivot to AIO (Artificial Intelligence Optimization) from SEO (Search Engine Optimization). Since the search engine is customized to everyone’s unique search history, when that whole game is turned upside down, it’s not just bad for Google but also bad for businesses that rely on the search giant to funnel readers and viewers to their own websites for impressions and clicks.
Winner: Google
Test 4: New York City mayoral candidates
With the New York City mayoral primary just around the corner and the race heating up, my apartment has been inundated with flyers about various candidates.
I wanted to get a quick overview of who the candidates are and what platforms they’re running on. With Google, I’d have to scroll and read many pages to catch up on what’s going on. Not with ChatGPT though.
The AI created a handy table breaking down all the issues. Of course, I’d have to read actual news articles if I wanted to do in-depth research, but for just a brief overview, this met the mark.
Winner: ChatGPT
Takeaways
I, for one, am happy to see Google get challenged on its search engine monopoly. It has become such a slog to use lately. With the way the platform works, you don’t know if the top suggestions are actually useful, or if they’re there because they’re tailored to you and paid tons in ad revenue to bag the spot on the first page. Since Google is just a glorified ad company, it always made it hard to justify its high multiples, so I am welcoming ChatGPT changing the game.
Still, I believe there will be a place for creativity that the AI has been unable to replicate so far. For example, my food blogger is likely going to be relatively insulated, as is Rolling Stone, as long as they’re able to provide content that can only be found on their websites.
So maybe this leads us to a world where Google is used in conjunction with ChatGPT. But for that to happen, Google has got to pull it together cause right now it’s teetering on the edge of becoming obsolete.
As a reminder, Signal From Noise should be used as a source of ideas for further research rather than as a source of investment recommendations. We encourage you to explore our full Signal From Noise library, which includes deep dives on Apple’s supply chain, gene editing, the America First trade, wonky economic indicators, and the rising wealth of women. You’ll also find discussions about the TikTok demographic, alcoholic-beverage companies, and weight loss-related investments.