Are we seeing a Kodak moment?
Kodak invented the digital camera – it had 90% share of the photography market in the 1970’s and 85% of camera sales. But in 2012 it filed for bankruptcy, a shadow of its former self.
It failed to disrupt itself by leading the digital camera revolution, instead succumbing to a slow demise—death by a thousand cuts. Competitors and startups flooded the market with digital cameras, and Apple joined the fray with the iPhone, embedding a camera into its groundbreaking design.
Google didn’t invent AI, but it was among the first to recognize its commercial potential, acquiring DeepMind in 2014 for $600 million. However, Google kept the technology in its research labs, aiming for perfection before launching a product.
Now, its hesitancy has become a threat to its credibility and the $200 billion annual revenue stream from “search advertising,” which faces stiff competition from ChatGPT.
In Quarter 3, 2024 Google search ad revenue was $49 Billion and annualized that means ad sales of $196 Billion a year.
ChatGPT had nothing to lose. It launched barely 2 years ago and today it is knocking down Google’s front door. Its traffic of 3.85 billion a month has now surpassed Google’s traffic for its search engine of 3.45 billion visitors a month.
Apple chose to disrupt itself by creating the iPhone, a revolutionary product that cannibalized its own iPod—the very device that had transformed the company from a struggling player into a music industry powerhouse and ultimately paved its path to becoming a trillion-dollar business. The rest, as they say, is history.
Waiting to be perfect is overrated.
Is my personal hunch correct?
There are many ways to research for my writing projects. My main two are Google and ChatGPT.
These days, I often start with a ChatGPT prompt instead of a google search. I use both tools to find inspiration and information, but they serve different purposes. Google offers a collection of links and resources, usually spanning 5–10 options. ChatGPT, on the other hand, provides a distilled summary in a single response—and now even includes links for added context.
Anecdotally and personally I am finding that I am choosing to use ChatGPT more than Google. The question that I ask is “Is it just me or are other people doing the same thing?”
Beyond observing my own interactions with technology and relying on intuition for answers, I’m turning to the data for clarity. I’m searching for insights, truths, and trends amidst the endless noise of the web, fueled by over 8 billion people. It’s an effort to uncover what’s happening and identify patterns in the overwhelming flood of information.
As humans, we are natural pattern-recognition machines—capable of spotting danger in an instant, discerning truth from lies, and solving problems with limited information. But today, we’re drowning in an avalanche of data, leaving us numb and overwhelmed.
In the past, we leaned on intuition; then, we relied on data. Now, we’re turning to AI to find answers. Yet, even AI is far from perfect.
What’s the difference between Google and ChatGPT?
Google and ChatGPT are both powerful tools for accessing information, functioning as both competitors and complements. However, their approaches and functionalities differ significantly.
- Google is a search engine that excels in retrieving a broad range of existing external content. It directs users to various websites, offering real-time information and diverse perspectives. This makes it ideal for specific inquiries needing up-to-date data or extensive research.
- ChatGPT operates as a conversational AI, generating responses based on its training data. ChatGPT excels in synthesizing information to provide direct answers and engaging in dynamic dialogues, which can be more tailored and interactive than Google’s one-way search queries. However, ChatGPT cannot fetch real-time data or offer the breadth of viewpoints that Google can through its links to external sites.
The choice between Google and ChatGPT depends on the user’s needs:
- Google is preferable for accessing the latest information and a wide range of sources.
- ChatGPT is better suited for interactive learning, content creation, and explaining concepts in a conversational manner.
These differences are crucial for users to consider to effectively utilize each tool according to their specific information needs.
So they are both complementary and competing. And they are also moving onto each other’s turf. ChatGPT has added ChatGPT search to its platform and Google has added its competing ChatBot Gemini to its search engine.
So comparing data between both is a glimpse into what’s happening and also into what the future landscape will maybe look like.
But what is the data telling me?
Is the data revealing a big shift?
Web traffic is a simple data indicator of what we are most interested in and what platforms are capturing our attention. Website traffic comes from a few sources and for many it is from Google search.
Google changes its algorithm and media companies die or thrive. Google had become the god of the digital universe. The digital traffic policeman. Its algorithms can make or break businesses. Traffic can be given and it can be taken away with one tweak of the rules that determine where they send traffic.
With the rise of social media we also started to see traffic from Twitter (now X), then Facebook (Now Meta), followed by Instagram (hasn’t changed its name yet) and now TikTok. Influencers emerged and that gave power and attention to podcasters that attracted clicks and influence.
Today we have a new kid in town named “ChatGPT” and they have many emerging competitors. These include the major players Microsoft-Co-Pilot and Google Gemini, Perplexity and Claude that have all released Chatbots.
So what is the data saying?
What’s the signal in the noise of the data?
Signal one: ChatGPT traffic
ChatGPT’s traffic is growing fast and after setting a new monthly traffic record of 2.2 billion visits in May 2024, ChatGPT kept climbing, to 3.7 billion visits in October, according to Similarweb.
To put that growth into some context, ChatGPT “only” received 152.7 million visits in its first month in November 2022,(barely 2 years ago).
Below is the chart showing the growth from November 2022. But in April this year (2024) OpenAI (that owns chat GPT) changed the domain name from Chat.OpenAI.com to a simpler domain name of ChatGPT.com that makes much more sense for branding, reduce confusion and for simplicity. That is why you see below the orange line fall away and the blue line rise.
But what is telling are the growth numbers. Chat GPT has had the following growth metrics in the last year.
In October 2024 it had achieved:
- 17.2% month on month growth
- 115.9% year on year increase from 2023
The signal in the noise reveals that ChatGPT is a traffic threat and a challenger.
So let’s look at Google’s traffic as a comparison. The giant incumbent vs the upstart.
Signal two: Google traffic
Google has dominated search for nearly 20 years. But the growth is slowing. And over the last year since 2023 Google has had an estimated 3.45 billion visits.
Google’s growth in comparison to ChatGPT has plateaued.
- In the last year Google has only grown 4.5%
- In the last 5 years it has grown 44.35%
In essence, Google’s growth is minimal as it almost has a monopoly. But it is now fighting an existential battle as ChatGPT has passed its traffic and also is offering a competing search engine.
The signal in the noise here is that Google has started to top out and maybe reached its pinnacle. So, it needs to find new revenue streams.
Signal three: ChatGPT competitors
Let’s take a step back and look at the AI landscape and see what else is happening. These include ChatGPT direct competitors and other AI platforms that produce AI images and more. In the main the whole AI platform and AI app industry sector is also seeing rapid growth.
The “Other” AI ChatBots
Microsoft Co-Pilot – 69.4 million visitors and a monthly jump 87.6%. This is a bit muddy as Microsoft is starting to direct traffic from its Bing AI and Search hybrid site.
Google’s Gemini Chatbot – 291.6 million users which is a 9.2% monthly increase and a 19% annual growth.
Claude Chatbot from Anthropic – 84.1 million visitors in October 2024. 25.5% monthly growth and a 394% annual growth.
Perplexity chatbot – 90.8 million visitors in October 2024, which is 25.5% monthly growth and nearly 200% annual growth
Top Generative AI ChatBots by Market Share – November 2024
The signal in the noise here is that as a horizontal and general generative AI tool and Chatbot it is now the dominant player. In most markets one player ends up dominating and then the others fight over the crumbs.
The bottom line(s)
In looking at those numbers I think it is clear that ChatGPT has become the “go to” platform for “Generative AI“ at nearly 60% market share(as its competitors are a fraction of its monthly users) just like Google is the first place for performing search. But Google Chrome is not going away anytime soon and will coexist with AI Chatbots. It has many levers to pull and deep pockets.
The questions are many and include “Will ChatBots and Search blend and become hybrid?” or “Will they stay in their respective corners”. Google is adding AI to its search and ChatGPT is adding a search feature to its app.
The other key to what happens in the future is when ChatGPT starts to monetize its user base of nearly 4 billion monthly visitors (It was announced in the Financial Times recently that they are exploring and even hiring experts to help them do that)
This will be something to watch closely because when Facebook launched its ad based model, the social media industry was transformed and the game went from free to pay to play as the platform’s algorithms were designed and continue to evolve to maximize revenue at the expense of the user.
The other fire that ChatGPT will need to address soon is that it is also burning through $5 Billion a year and shareholders will need to see monetisation soon. But when? But that is for exploring another day. So watch this space.
So…what we are watching is a battle between the old lion (valued at Trillions of dollars) and the new challenging up-start lion cub (ChatGPT) which is currently valued at $150B and is still a start-up.
AI is here to stay but what it will look like in ten or twenty years is a guess at best. Kodak took a long time to die.
The post Is Google’s $196 Billion Empire Under Threat from ChatGPT? appeared first on jeffbullas.com.
* This article was originally published here
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