On 5th March 2025, the VP of Product at Google Search shared that AI overviews provided by Google is getting a Gemini 2.0 upgrade. He cited that AI overviews were popular with Google Search users and more than a billion people used it. The advanced capabilities of Gemini 2.0 was intended to help with harder questions like advanced maths and multimodal queries. AI overviews were made accessible to a wider set of users as a sign-in wasn’t required to get access. Apart from the rollout of the AI overviews to a bigger user base, Google is also introducing an early experiment in Labs: AI mode. At the moment, the testing of AI Mode in Labs is limited to Google One AI Premium Subscribers.
When the leading search engine in the world is switching to AI responses and curated links, it is proof that AI is revolutionizing the search engine business model. Google is by-far the dominant search engine registering a monthly visit of 81 billion between December 2024 and February 2025. In contrast to the staggering user base of Google Search, the user base of Open AI’s Chat GPT is less than 4 billion. A more direct potential competitor to Google namely the AI search engine Perplexity had about 101 million visits. While Google is slowly entering AI mode preempting a growth of AI search engine, Perplexity has announced a browser Comet to built the “future of internet browsing”. Thus far, the actions of both search engine companies suggest that AI is poised to dominate in the long term. The Browser launch of Perplexity is an attempt to challenge the reigning supremacy of Google’s browser so that the channel through which users access the information is controlled for gaining market share of the blooming AI search business.
AI-powered search revolutionizing search engine business model
Traditionally, search engines have earned most of their money through their Ads. The business model of search companies revolves around their ability to engage eye-balls through their marketing placements and drive traffic to the websites. A user logs on to the search engine page and types in his query. The search engine then displays numerous Sponsored Ads alongside organic web links to content providing the required information. Whenever the user clicks on a search result to visit a webpage, the companies obtain a sales lead. The search engines scrape the content for free and rewards content-creators with the referral traffic. The content creators in turn make money through ads, subscription or lead generation for e-commerce websites. Apart from indirect income, search engines also directly host sponsored ads for e-commerce companies like Amazon and Flipkart. By acting as the gateway to the internet, the search engines like Google wield enormous power in the Tech world. In the case of Google, the dominance is pronounced because it also dominated the browser that is used to access the web. As per Statista, Google’s Chrome accounted for 65.82 percent of the global web browser market share in December 2024. The announcement of launch of browser Comet by Perplexity aims at obtaining a competitive edge throughout the search ecosystem.
Apart from exacerbating the browser wars, AI search is set to disrupt the search ecosystem by reducing the number of web page visits. Unlike traditional search engines, AI search directly provides the information or summarizes the information without clicking through source pages. Monetization is challenging when AI simply obtains the data and displays it to the user than attracting human eyes onto the webpage. When users get answers to questions without visiting the source, referral traffic plummets and affects the revenue of Big Techs. AI search engines that provide answers by synthesizing the required information along with citation links is the future of the search business. A report by TollBit calculates that AI chatbots drive 96 percent less traffic than traditional Google search. A 96 percent impact on a key revenue source is sure to revolutionize the entire industry.
Conclusion
In the AI era, human attention span will command a premium. Presently, when a human searches the web with a traditional search engine, the user finds 10 links relevant to the keyword query in the first page of search results. The user may visit the links to synthesize the information or judge the appropriateness of data. For deeper search, the user may click to the next pages of search results, going into hundreds of weblinks to find the exact match of information that serves the purpose. With the AI search model, the pressure on human attention is limited. A powerful AI tool can instantly analyse information from multiple sources and provide a coherent answer relevant to each user. When human eyes are no longer on the webpages, the marketing budget and sponsored ad placements may move elsewhere in search of real customers.
