The Beginning of the End for Search

What is Google if you remove Google Search's Ad business. Its a company that is good at making long term bets in technology.

Any Google Pixel user/observer would know that Google was the most AI-First company. The AI features pixel users were able to use 3-4 generations ago are not just coming in Apple in a small way.

Their bet on building their own TPUs before the AI race has started is another proof point of how long term they think.

They have successfully looked at large opportunities and create a meaningful large businesses, Google Office Suite, Google Cloud playing on their strengths rather than catering to status quo.

But there is a big problem.

Google Search is increasingly becoming irrelevant.

ChatGPT and Claude are becoming the main interface for how we will interact with web. Humans will not be searching the web as they used to.

Search for last two decades was the gateway to web. Its changing. For those who use a paid version of ChatGPT or Claude, search usage drop is down by at least 50%. And as ChatGPT and Claude gain WhatsApp level popularity in the non-US geographies (which will happen sooner than we think), the drop in search usage will be meaningful and visible and Google will not be able to stop it.

The only way to stop this is if Gemini or something new from Google will become the main competitor to ChatGPT or Claude. Gemini's adoption continues to be slow and doesn't seem to capture the position of being the gateway of the web.

This poses, a big strategic problem for Google's main business - Ads.

ChatGPT by being the gateway of the web, has already started to show they can build an ad business on it. Their ad business is now already at $1B ARR with in less than a year of launching it. In any other era, this itself would have been the main story of the year.

In some ways this is the same problem Yahoo has with Google. Google came and took over the gateway of web from Yahoo.

For now, Google seems to control the slow down in queries and continues to say its growing its search queries. My take is they are adding up the AI/Agent search queries into the metric which would grow but if we only look at human only queries, the proof might have started to emerge.