Google is the most popular search engine in the world and since 2000 it has been maintained solely thanks to advertising. In 2023, the company declared USD 175 billion in revenues from this title. There are two tools to handle ads: Google Ads (formerly AdWords) i Google AdSense.
Thanks to Google Ads, advertisers can create and publish ads that appear, among others: at the beginning or end search results Google and on websites related to the Google advertising network. Thanks to the use of keywords, these ads reach users looking for specific content, products or services.
Whereas Google AdSense allows website owners and blogs monetize their content through advertising provided by Google. Advertisements are usually adapted to the content presented on individual pages or the interests of visitors. The owners of the websites on which the ads appear receive part of the money that flows to Google.
The appetite for higher profits in the entire IT industry has been aroused by the boom development of artificial intelligence. So it's no surprise that Alphabet for several years, he has been working on combining the existing free Google search engine with generative artificial intelligence Google Gemini.
What is the innovation of this project?
After entering your query to SGE browser the user will receive personalized results containing accurate data, product information, recommendations or photos. And this is where the stairs begin. Queries processed by SGE will generate significantly higher costs related to IT resources, while significantly reducing advertising revenues.
What's next for advertising revenue?
The information found using a search engine with the SGE function is structured and presented in such a way that the user is often no longer interested opening subsequent subpages, where AdSense ads are most often displayed. This means that the traffic on many websites previously generated by Google search engines will drop significantly, and Ads/AdSense ads will reach fewer people. This means that after the introduction of SGE to the general public, even paid use Google may lose up to tens of billions of dollars in profit annually.
To this publisher news websites and bloggers who will lose on search engine traffic will probably withdraw financial claims towards the American giant, which will worsen Alphabet's already difficult situation.
How much will SEG service cost?
Last year's Reuters report shows that costs of processing queries in search engines supported by neural networks and language models, such as Gemini, are ten times higher than processing them through a regular search engine. Google is the most popular search engine on the Internet and answers millions of queries every day. Thanks economies of scale the additional costs that SGE would generate could run into billions of dollars annually.
To summarize the use of the innovative SEG search engine, not only would Google not make money on advertising, but it would also generate huge costs that would most likely not be covered by subscription revenue. From a business standpoint, trying to popularize SGE could very quickly lead Alphabet to bankruptcy.
As the example showed Microsoft and search engines Bing users are not interested in artificial intelligence in search engines. The same applies to SGE, which is currently being tested in several markets. And for now, it is received quite lukewarmly by users. Nevertheless, Google, like other IT competitors, will continue to work on it development of artificial intelligence. It is difficult to say what will happen next with SGE at this point. Perhaps there will only be access to it in the paid premium version. Or maybe it will never become widely available. The decision on what to do next with SGE remains in the hands of Alphabet's management.
