Google slips as OpenAI said to be working on search product: report (opens in new tab)

I asked Kagi search's LLM if cloud could make up for their consumer business tanking, and it pointed out (summarizing, it wrote a half page report with references) their cloud division is only 20% of their current revenue, it lost $5.6B on $13B of revenue in 2021, and that its growth is slowing.

For the same query ("assuming they lose search and advertising google cloud revenue likely to make up the difference in revenue?"), google responded with the following top hit:

> Simply Wall Street - Jul 16, 2023 — I assume that Google's Cloud revenue will grow at 18.5% for the next 5 years, in line with expectations of the industry's growth rate.

Long GOOG (3 years) might make sense though. Word in the valley is they're trying to increase margins by driving costs down. That should improve their multiplier even as they retreat from core markets and their revenue drops.

[edit: I summarized what it said wrong. Ad revenue is 80%. Everything else (including Android licensing and hardware sales) is 20%. It didn't give a percentage for cloud revenue.]

Search subscription seems to be working quite well for Kagi. Source: I use it, and I like it. If you search HN for Kagi you'll find a lot of discourse about it.

Search market share is all about placement in the browser experience. The most is the browser share. If anyone remembers the browser wars and portal wars that’s what that was all about. Until chrome is dead and Google stops buying the front door on most other alternatives their search engine will dominate. Not because it’s better but because it’s the lowest energy configuration for accessing internet content.

Remember when Bing was integrated into chatGPT? Now I do about half my searches through Bing.

But, it is unclear whether there is room for advertising in chatGPT the way there is room for ads in search. But I suspect there will somehow be a way!

Bing's reputation is such that they'd have to be giving out free money for people to switch.

Besides, GPT was only available on Edge. Again, reputation.

Maybe it would be for paid customers only.

Alternatively, if OpenAI thinks search queries are an important signal, the search engine could be free with no ads for everyone. For example, I was surprised that Amazon pays Prime members $20 for using Amazon Photos. I think they might be using Photos to get more data for AI training.

Tech has a way of ensuring relative irrelevance for companies that achieve market dominance.

There is an entire industry of companies that attach stock dips to whatever negative news they can find for it. Often this is done automatically and the articles published automatically.

Whenever a stock dips, a whole bunch of people want an explanation why, so they google it and read the meaningless article sandwiched between layers of ads.

DuckDuckGo injects affiliate links into eBay search results, depends on Bing for its search index and has MS trackers in its app (or at least use to, I stopped caring). You should take a look at Brave Search instead for an independent, privacy-friendly search engine.

So far OpenAI has bet that people are simply willing to pay for good services. We'll see if that holds.

This is simply not possible. When I left Google AAR per North American users was $1200/y. I’m betting it’s close to 2k now.

Try turning down that money for 20 bucks a months. Subscriptions will never scale due to one simple fact. When a subscriber pays only one party pays and has a ceiling. When advertisers pay an infinite number of parties can pay per user with no ceiling other than performance.

Ad tech is just getting started.

Perplexity is actually good though. If I have to guess, OpenAI is going to clone their product.

What makes you say Bing + Copilot is "useless?" It does a lot of stuff.

I'm not sure that being bad is not the same as being vulnerable. Even people who despise Google (like yourself) apparently still use it. Google replaced Altavista et al. because it was miles better than they were. Nothing today is miles better than Google, and there is a lot less competition than there was in 1999. Google is synonymous with search, literally. I can't imagine a scenario in which anyone in my family stops using Google as a search engine; the idea wouldn't occur to them. I've been a Kagi user since the beta, and a DDG user before that, and still don't think Google's going anywhere soon.

I agree that Google search is very vulnerable. The results are spammy and the current ad volume badly degrades usability for me. In my case, I don’t use Google search much anymore. Previously it was my one stop for finding information online.

Instead of Google search:

I’ve switched almost exclusively to Kagi for vanilla search. It feels like Google in 2015, and the forums/small web filters are great. I do rarely use !g, and usually I'm disappointed.

If I just need a quick question answered I’ll usually use Perplexity.

For coding questions, I mostly use copilot and documentation these days. I barely use search for coding questions, unless I run into a weird edge case, or need to find Github issues for a project. There’s too much link spam to wade through, and copilot is built right into VSCode, so I don’t have to context switch.

I was a big user and early adopter of ChatGPT, but I don’t use it much anymore. Special use models are better for specific use cases (e.g. copilot for coding), and if I want to learn general information about a topic or gather some opinions, I much prefer to search forums and blog posts or watch some YouTube videos (this is the one major bright spot for Alphabet imo). If I do need AI to do something for me, I prefer to use an API or local model. ChatGPT is inferior to the API/local products, especially if you know some Python. This is even more true when you take into consideration copilot (and starts to hint at the compounding opportunity of these tools).

If I want to do a deep dive on something I don’t even bother with most web content these days unless I'm researching a cutting edge topic. The general web is too noisy and inundated with inaccurate and low quality content. Most of the time I either buy a book or directly visit an authoritative source (e.g. the SEC, the courts, Wikipedia, etc.). Less frequently I'll find a niche forum or blog via Kagi's filters, or hit up Google Scholar/Arxiv (another bright spot for Alphabet, but very niche).

The most interesting thing to note here is that I’m paying for almost all of these things, rather than using free Google search, because the Google search user experience has degraded so badly. Kagi, copilot, LLM APIs, books, they all cost money. That doesn’t bode well for the Google search product long term.

I feel the same. I keep using other search engines to get some useful response or content. I think the AI generated content or promoted links changed the results for the worse these days...

I welcome the completion but surely Google could clone that. The real bet is that they won’t have the courage to do it.

FWIW, I tried switching to Bing and it was equal or worse trash. I can't quantify it but I had my default search set to Bing for a few months and I routinely would search, find nothing relevant, then head to Google.

Google sucks but it still seems better than the other bigger players at least. Not a fanboy. I'd like to see something actually useful replace them all but that was my experience.

> You could put any MBA school trained flunkie in his position and the result will be the same.

Most managers (at all levels) could be replaced with a Magic 8 Ball, and you would get similar results. Although, in some cases, consistency would improve.

https://en.wikipedia.org/wiki/Magic_8_Ball

Here is the thing about Sundar, emphasis mine: https://share.zight.com/7KunAo4K

I always wonder why they keep him around when it's clear as day to anyone paying attention he's... not the best.. but.. that graph somewhat speaks for itself.

"Stormed by the competition" by what metric? And no, Substack blogs and HN comments don't count.

This is one of the things I like about Cursor (https://cursor.sh/, a fork of VS Code that adds AI features).

It uses GPT (I believe they're running their own fine-tuned version), and allows you to '@' items like your files, folders, and (most impressively) any documentation.

So, if I'm working on something that uses React Hook Form, I can paste the URL to the RHF documentation. Cursor will index it (presumably creating embeddings for each page), and then I just '@' the RHF documentation in the chat and it'll find the relevant pages and include it them the context for GPT to answer.

It's very useful. I already subscribe to ChatGPT Plus but Cursor adds something special that I'm more than happy to subscribe to Cursor too.

OpenAI needs to be fast (few ms), and be able to show sources (links)

I had a Vue question and Google was utterly useless and ChatGPT was giving only answers about the Options (legacy) API. I needed answers for the Composition API. So I told ChatGPT this is syntax for Options <code> and this is syntax for Composition <code> please restrict your answers to Composition examples and it worked.

I've been using phind almost exclusively because it cites sources in the sidebar and it's free if you use their model. If I need code generated, ChatGPT will generally do a better job, though.

> Most content you find on Google is SEO trash, an LLM agent should be able to cut through that for me and save quite a lot of time.

I don't believe this will last.