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Lots of chatter about how the new AI chatbot is going to eat Google's lunch.
One example:
https://www.nytimes.com/2022/12/21/technology/ai-c...
but SA, Medium, lots of folks have similar screeds.

So as a holder of GOOGL stock, is it time to sell? I would argue no.
Here is the scary quote:
Google may be reluctant to deploy this new tech as a replacement for
online search, however, because it is not suited to delivering digital ads,
which accounted for more than 80 percent of the company's revenue last year.

So OpenAI is going to eat Google's lunch. End of Google. But think about the implications of that.
How is OpenAI going to monetize their chatbot? Either via ads (see Google) or via
subscription model (see many failed alternatives). So unless the new kid can essentially
replicate the ad-serving model that Google has developed they don't have a viable business model.
Any tweak to the chatbot that allows for ad-serving can be done just as well by Google. So I don't see
much of a threat here. What am I missing?

Rgds,
HH/Sean

So as a holder of GOOGL stock, is it time to sell? I would argue no.

Great topic Sean. I was going to come here to write about this but you had already taken the initiative.

If others have not checked out Chat GPT, then you simply must visit and enter a few sentences into the dialogue box. It cannot be really explained/experienced unless you write the sentences yourself, and try to make them hard and as human-like as possible.

https://chat.openai.com/chat

I have programmed AI chat software in the past. I performed many tests and thought about the success of Chat GPT carefully, and my belief (I won't call it conclusive, but what I thus far believe to be extremely likely) is that it it will not disruptive to Google as a business. This belief not merely gut-feeling but have some real logic behind it.

It will, however, put Google on guard and they will certainly (because they have no choice, and frankly there are no constraints) lift the quality of their searches to involve much better context-sensitive searching.

I actually think it be more likely to increase Google's earnings rather than decrease it. General-search has a strong winner-takes all effect, the more that is indexed, the more the search engine becomes favoured. Google is not single paradigm, despite that appearance from the input box. It searches over completely different engines, and presents information completely differently (maps and transport routes, shopping, research articles, summary answers to specific questions). Some of these involve products/serves (ads) and others don't. The Chat GPT (-like) searches will be identified by the nature of the question, and the results similar to what you see I Chat GPT today can be provided - generally without ads. This increases value of the search as a result, and people return. When the reply has a product/service that is applicable, and it is in the advantage of the user to see this, the auctioned product/service can then, and only then, be presented.

Ghat GPT will get heightened attention for quite a while, but after several years when Google can recognise the input domain and provide similar answers, they'll remain on top *and* the value of the search for the public (and thus Google's scope for advertising dollars) will have increased rather than decreased as investors might be fearing today.

- Manlobbi

Thanks Manlobbi,

There was a discussion back on the old boards about how consistently _bad_ the search results were within the Amazon ecosystem. I would posit that they are bad because I'm not the customer, I'm the product and all the customers are paying to put random s*** in front of me in the hope that I will click on one of those links. One suggestion was to use Google to search Amazon because the hit rate was so much higher. As long as Google remains the gold standard it is hard to see them being toppled and nothing I've read about ChatGPT changes my mind about it.

Rgds,
HH/Sean

If the answer to a query is generated by a search engine other than references to websites, it better be accurate which is not the case in current AI technologies. Otherwise the engine provider may bear liabilities.

<<If the answer to a query is generated by a search engine other than references to websites, it better be accurate which is not the case in current AI technologies. Otherwise the engine provider may bear liabilities.>>

That is an excellent insight that has not even crossed my mind. Thank you.

- Manlobbi

Here is what chatgpt thinks about it's threat to Google:

Will chatgpt erode google's advertising revenue

It is unlikely that ChatGPT, or any other single product or company, will have a significant impact on Google's advertising revenue. Google is a large and financially successful company that generates a significant portion of its revenue from advertising. The company's advertising business is diverse and multifaceted, and it is unlikely that a single product or service, such as ChatGPT, would be able to significantly disrupt or erode Google's advertising revenue.

ChatGPT is a chatbot that uses natural language processing and machine learning techniques to generate human-like responses to text input. It is not a standalone product or company, but rather a feature of the OpenAI language model GPT-3 (Generative Pre-trained Transformer 3). While GPT-3 is a powerful tool that can be used for a variety of purposes, including natural language processing and generation, it is not directly related to Google's advertising business.

It's also worth noting that the advertising industry is constantly evolving, and Google is well-positioned to adapt and respond to changes in the market. The company has a strong track record of innovation and a diverse portfolio of products and services that help it maintain a strong presence in the advertising industry.

Over the past weekend I asked ChatGPT what I considered to be a simple query within the
realm of its capabilities:

"List of cities in Portugal with train stations?"

ChatGPT's response was to direct me to the Comboios de Portugal website and
check the list of train stations.

Needless to say, I was underwhelmed. ;-)

-Rubic

Sounds like a Google search result.

Will chatgpt erode google's advertising revenue

It is unlikely that ChatGPT, or any other single product or company, will have a significant impact on Google's advertising revenue. Google is a large and financially successful company that generates a significant portion of its revenue from advertising. The company's advertising business is diverse and multifaceted, and it is unlikely that a single product or service, such as ChatGPT, would be able to significantly disrupt or erode Google's advertising revenue.

2025 update to same question from ChatGPT:

In short, ChatGPT and similar AI tools pose a serious threat, but Google is adapting. The real impact will depend on how well AI integrates ads without compromising user experience.

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