Google considers charging for AI-powered search in big change to business model

Google's AI-powered search is an experimental service that began testing in May last year. It aims to provide more detailed answers to user queries by leveraging generative artificial intelligence. This service presents an AI-powered snapshot of information while still offering links to further information and advertising. The technology is designed to enhance the traditional search experience by generating more complete and conversational responses, which could potentially reduce the need for users to click through to other websites for additional details.

Google is considering charging for AI-powered search features as part of a significant change to its business model. This move is driven by the need to balance the embrace of the latest AI innovations with the preservation of its biggest profit driver, which is the revenue from search and related ads. The company reported $175bn in revenue from search and related ads last year, and the introduction of AI-powered search features poses a conundrum over how to maintain this revenue stream while adapting to new technologies that could disrupt traditional ad-supported models.

Google is exploring options to add certain AI-powered search features to its premium subscription services. These services already offer access to the new Gemini AI assistant in Gmail and Docs. The integration could involve offering enhanced search capabilities as part of Google One or Workspace subscriptions, which come with different pricing tiers. However, the specifics of how AI-powered search will be integrated and when it will be ready to launch have not been finalized, and Google could still opt to introduce elements of its experimental AI-powered service into its main, free search engine over time.

Google faces several challenges with the introduction of AI-powered search, including:

• Computational costs: AI-generated search results, such as those from the Search Generative Experience (SGE), consume more computing resources than traditional search responses, making them more expensive to provide.

• Advertising concerns: The AI-powered search could potentially provide complete answers that reduce the need for users to click through to advertisers' websites, which could impact Google's ad revenue.

• Publisher fears: Online publishers are concerned that if Google's AI-powered search extracts and presents information directly from their web pages, it could lead to fewer users visiting their sites, thus affecting their traffic and revenue.

• Market competition: Google is also responding to competitive threats from companies like OpenAI, which launched ChatGPT, and Microsoft, which has integrated GPT-powered search and a chatbot into Bing. Google must find a way to leverage AI without losing its dominant market share.