Google’s $3 billion revenue deal with Samsung as the default search engine is up for renewal, and Microsoft is reportedly considering offering Samsung an alternative deal. Google’s dominance in the search market has come under scrutiny by the Department of Justice, and Microsoft’s Bing has struggled to compete. Both companies are investing heavily in AI chat technology for search, with Google’s Bard set to launch later this year. However, there are concerns about the potential for bias in search results and data privacy.
Google’s lucrative deal with phone manufacturers, which sees the search giant pay billions of dollars annually to be the default search engine on their devices, is up for renewal with Samsung. Google currently pays an estimated $3 billion in revenue to Samsung, and the news that Samsung would consider switching reportedly surprised Google employees. However, Microsoft could potentially step in and offer a deal to Samsung, as the two companies have an established partnership. Microsoft’s Office apps are preloaded on Samsung phones, and Samsung phones have built-in software that makes it easier to connect them to Windows computers.
Google’s dominance in the search market has led to a contentious battle with the Department of Justice (DOJ), which has focused on the company’s apparent pay-to-play model. The DOJ argues that Google’s payment to maintain default status has “harmful effects on competition and consumers”. Google’s pay-to-play model has also hindered Microsoft’s search engine, Bing, which has struggled to compete with Google for years. However, Bing saw a surge of interest with the launch of its AI chatbot, which relies on OpenAI’s GPT model. This prompted Google to launch an all-hands “code red” response.
It’s unclear whether Microsoft would be willing to pay the same amount as Google to secure default search status on Samsung devices. Unlike Google, Microsoft relies far less on search and advertising and derives a significant amount of its revenue from cloud and enterprise solutions. Samsung’s reported reassessment may also be a moot point, as Google is set to integrate its new artificial intelligence chat technology, Bard, into search as early as this fall.
The relationship between Google and phone manufacturers, particularly Apple, has come under scrutiny in recent years. In 2019, it was reported that Google paid Apple an estimated $9 billion to be the default search engine on its devices. This has led to accusations that Google is paying for a monopoly on the search market, which harms competition and ultimately harms consumers. The DOJ’s investigation into Google’s search dominance is ongoing, and it remains to be seen whether the department will take any action against the company.
The use of artificial intelligence chat technology in search is becoming increasingly popular, with both Google and Microsoft investing heavily in the technology. Google’s Bard, which is set to launch later this year, will allow users to have more conversational interactions with the search engine. Microsoft’s AI chatbot, which relies on OpenAI’s GPT model, has already seen success in the market. However, the use of AI chat technology in search has raised concerns about data privacy and the potential for bias in search results.
Overall, the renewal of Google’s deal with Samsung could have significant implications for the search market, particularly if Microsoft can secure a deal with the phone manufacturer. However, the integration of artificial intelligence chat technology into search is also set to have a significant impact on the market and could change the way users interact with search engines in the future.