PART-1: The 9 forces squeezing Google.
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1. Search quality degradation: Main drivers are SEO Exploitation, Ads Escalation, and Unsolicited “Smart Search”
2. Amazon Search: More people are bypassing Google and going straight to Amazon to search
3. Instagram and TikTok Search: The younger generation turns to TikTok and Instagram for some categories of content
4. Reddit has become the more trusted source as the inauthentic SEO-hacked web pages are increasing
5. Bing: With Microsoft investing heavy in OpenAI and the success of ChatGPT, Bing could become more differentiated and interesting than Google for the time being, regardless of the hilarious Sydney meltdowns
6. Apple has its own search engine, Spotlight, and Siri, which could become powerful with the addition of language models in the future. Apple can also terminate the deal with Google that makes it the default in Safari.
7. Other search engines like Neeva and Perplexity.ai offer a more private and ad-free experience and are worth keeping an eye on.
8. ChatGPT and other language models: They are seen as a superior way to address certain queries compared to conventional search engines. However, the impact of language models on Google’s ad revenue remains to be seen, as the ratio between direct answer queries and source navigation queries is not publicly disclosed.
9. The Justice Department lawsuit: The investigation adds to the already complex web of trends affecting Google’s search empire and adds an additional layer of uncertainty to the company’s future
PART-2: 9 potential moves Google could make to get out of this situation.
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1. CEO change: perhaps, it’s a good time for a leadership transition.
2. Double down on the Search API: Google’s Programmable Search Engine API could become more valuable with the rise of demand from language models that need it. Google could increase the price of this service.
3. Get serious about YouTube Premium: Google can improve its YouTube Premium service by building a separate recommendation engine for premium users. This could incorporate a natural language prompt to provide a customizable recommendation page and the option to generate custom playlists. This could lead to significant growth in paid subscribers.
4. Launch Bard Premium: The potential to launch a paid version of its chat feature, Bard, as a standalone service. This would offer a more refined and consistent user experience and differentiate Google from competitors.
5. Explore Bard for Business: They could create tailor-made language models for various industries and offer a value-based Enterprise price level. tune the models using their own private enterprise data.
6. Acquire Reddit: They could acquire Reddit and rejuvenate its user interface and internal search capabilities. The objective should be to achieve Reddit’s growth with a non-ad-based revenue model.
7. Go all-in with Google Workspace: Google Workspace could be infused with AI capabilities beyond basic generation of email replies and text completion. Google could create industry-specific versions powered by foundation models trained on unique data for each respective field and command higher pricing for unique versions.
8. Fix Google Cloud Business: Turn Google Cloud into a self-sufficient financial powerhouse and make it a partial substitute for advertising profits when they dry up.
9. Get bold about hardware: Venture into the chip market and build own lineup of AI-focused hardware. This move could ignite a fresh revenue stream with higher margins than doorbells.
