There has been a lot of talk and publications in recent weeks concerning ChatGPT and how it may disrupt Google, with its overreliance on Youtube and ads.
This threat is real, and I believe it is long overdue. Google is relying on its cash cows, which have mostly remained the same or become worse over the years.
As a result, it is uncertain, but also irrelevant, whether the disruption will be caused by ChatGPT or by someone else.
For a Long Time, Google has NOT been Inventive.
Clayton Christensen explains in his book “The innovator’s dilemma” why disruptions often emerge from smaller competitors rather than dominating businesses.
One of the causes is that each corporation wants to keep its dominant market position.
A corporation that is the world leader in CD manufacturing has no interest in inventing the MP3 player. Even if the potential is recognized, the danger of losing money or failing to be the market leader in the new market is too significant.
There are numerous historical examples of this, which is one of the reasons why no technology company has ever been among the top five most valuable companies over time.
There is no doubt that Google provides many good products and has followed a clear pattern: beginning with Google Search, it has gradually expanded its portfolio to develop a network of apps that function together. Google’s moat, if you can call it that, is made up of a diverse set of apps.
There are various alternatives for each of the well-known Google apps.
As a result, I can’t think of any app that is truly unique or impossible to replicate: What is more difficult to replicate is the range of apps that complement and expand one another.
When was the last time Google launched something truly groundbreaking? This is a serious question; if you have any information, could you please leave it in the comments? It’s difficult to keep track of all the Google apps, but I can’t think of anything else. My only suggestions are specific regions from the “other bets.”
As a result, I’ve previously authored pieces (which I strongly recommend reading) that go deeper into Deepmind and Waymo. Waymo may be disruptive, but it also lacks a moat and faces stiff competition. Deepmind, an AI startup, on the other hand, may be the most innovative that Google has up its sleeve. Examples can be found in the linked article.
The Flaws of Google’s Cash Cows
However, the money-making apps (Google and YouTube) are not, in my opinion, innovative; in fact, they are the contrary. Google still operates in the same way it did 20 years ago, with the exception that there is now substantially more advertising.
It is not user-friendly in my opinion if the first 4 or 5 results are entirely advertising. Wasn’t it supposed to be the rule that every searcher should get the best results possible? That is no longer visible to me. There is considerable censorship as well, and the algorithm appears to prefer mainstream media.
It appears that only certain points of view are permitted. The remainder just does not appear in searches, at least not as top results. Here’s an example. It’s not about what you or I think about the moon landing; it’s about the paternalism philosophy. So my search query is to find out what evidence there is that the moon landing was a hoax. But the outcomes have nothing to do with that. So even if there was evidence contradicting the moon landing, I’d never find it.
YouTube has an unlimited quantity of fantastic videos, thanks to its users and channels rather than YouTube itself. When users submit their content elsewhere, YouTube loses its unique selling factor. Odysee, for example, supports synchronization, which means that videos are automatically posted to Odysee.
So, why do so many people continue to utilize Google and YouTube?
For one thing, the corporation strategically positioned itself quite well in the early smartphone days. Even today, an Android smartphone is built to access all Google services nearly from the start, and because everyone has a Google account, that’s exactly what users do.
Furthermore, it is simply a habit. Many individuals have been using Google and YouTube for over ten years. It has become habitual, and changing habits often takes a purpose and a period of conscious willpower.
This is something I notice in myself as well. I want to use Google products less, but I find myself falling back into old habits and opening Chrome, Maps, or YouTube, mainly when I use my smartphone fast and semi-automatically.
Overall, I find the Google user interface to be out of date and believe it is past time for the firm to make some adjustments.
Typing is time-consuming and inconvenient. The end result is littered with advertisements and censorship. This is not how an ideal Internet search function looks.
Who is Upending Google?
There have been numerous conversations regarding ChatGPT recently, but who will ultimately disrupt Google is unclear and irrelevant. ChatGPT, in its current incarnation, most emphatically does not. ChatGPT was trained on historical data and did not work for current events.
That alone is grounds for exclusion as a Google alternative.
However, this could change one day, and the system could be loaded with additional real-time data at any time.
The next edition should be released early next year. GPT-3 (the present basis of ChatGPT) to GPT-4, which should not be viewed as a simple app update but as a quantum leap.
Microsoft’s CTO describes 2023 as “the most exciting year in the AI community’s history.” Because Microsoft is a large investment in OpenAI, he is likely to have information that we do not.
Neeva is a Hybrid of Google and ChatGPT.
Neeva uses an intriguing method, as a summary answer is compiled from multiple sources. You can see the sources as footnotes underneath the result, as well as where parts of the answer come from where.
However, this is not yet publicly accessible and appears to be more of a standard search engine.
However, there are already several fascinating features that I would use frequently.
For instance, linkedin.com ranks top for this search query. A little dropdown menu allows me to choose whether I want to see more or less of this source in the future. In the long run, the user might customize his search results and hide websites more and more.
The Issue of Monetization
Perhaps sites like ChatGPT or Neeva haven’t yet figured out how to monetize this alternative method of information transmission. I’m not sure either, but I’m sure there is monetization potential where there are a lot of people.
I believe that information flow via digital interlocutors is the Internet’s future.
However, Google presently appears to be a static machine. There are also no customization options.
It appears that the goal is to maximize advertising revenue and discover the “proper” (politically correct) content.
Surprisingly, Google has previously gone down this road with Google Assistant. But it was never as good as ChatGPT. At best, it was useful to tell me what the weather will be like tomorrow. And it doesn’t appear that they intend to promote or even replace Google Assistant.
This could be because of the monetization issue. The business model is text ads inserted in search results. But how do you make money with a voice assistant?
That leads me back to the start of this post. I believe Google is uninterested in change and hasn’t modified its cash cow apps in years. But I don’t think this can last forever. Google is in a pickle.
On the one hand, it requires funds from the cash cows for research and a large number of well-paid staff.
On the other hand, there is a risk that ChatGPT, maybe in collaboration with Microsoft, will develop a genuine rival to Google. Because one thing is certain: Google Search and YouTube is not humanity’s final technical achievement. AI, brain chips, and human-machine networking are only getting started.
Conclusion
Google must adjust to reality rather than the other way around and this reality is made up of both technical advancements, such as ever-improving language models and what people want.
At its core, an Internet search is straightforward: the searcher seeks the best response to his or her query. People, on the other hand, dislike excessive advertising and paternalism.
In my opinion, if a corporation pursues this road too aggressively, it will only function for a limited time. However, as time passes, more individuals will turn away and seek alternatives.
Whether it’s ChatGPT or someone else, I believe the competition has a chance to challenge Google in the next years since Google has changed too little for too long with searches, YouTube, and ads. That is a positive development for both the user and the internet as a whole. Strong competition drives advancements.
Of course, none of this means that Google will cease to earn money or that stockholders will no longer profit from their shares. With current revenues, there is still enough money for research or buybacks.
For this reason, as well as the current advantageous value, I maintain a buy rating, as I have in previous articles that have emphasized specific features of the company. By the way, another essay I authored looked at whether Google had achieved its peak in terms of users.
Because the tailwind of increasing Internet users contributed to some of the rapid growth of the last 20 years. So, in my opinion, Google is still a buy that will most likely make you money as a shareholder over the next five years. Personally, I choose Microsoft and Amazon.
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