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Four Big Threats (Plus a Bonus Threat!) To Google’s Dominance Next Year (Thinks Out Loud Episode 436)

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AI might kill your brand — but probably not. It’s far more likely that AI will kill Big Tech’s brands, and in particular, Google. The search giant faces more threats to its business right now than at any time in the last decade-plus.

What are the big threats facing Google’s dominance? Why do those threats matter to your business? And, most importantly, how can you make sure that the four big threats Google faces next year don’t become threats to your business too? That’s what this episode of Thinks Out Loud is all about.

Want to learn more? Here are the show notes for you.

Four Big Threats (Plus a Bonus Threat) To Google’s Dominance Next Year (Thinks Out Loud Episode 436) — Headlines and Show Notes

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You might also enjoy this webinar I recently participated in with Miles Partnership that looked at "The Power of Generative AI and ChatGPT: What It Means for Tourism & Hospitality" here:

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Transcript: Four Big Threats (Plus a Bonus Threat) To Google’s Dominance Next Year

Well hello again everybody and welcome back to Thinks Out Loud, your source for all the digital expertise your business needs. My name is Tim Peter, this is episode 436 of the Big Show, and thank you so much for tuning in.

We’ll I think we’ve got a really cool episode for you this week. I had been spending a lot of time between last week’s episode of, that last week’s episode that asked, “Will AI Kill Your Brand?” And doing a bunch of prep work this week for a class that I teach at Rutgers Business School on AI and Marketing about will AI also kill Google’s brand?

Will it kill other big tech brands? And the more I thought about it, the more I realized that A.) this is a super complicated topic and not something that can be covered in a single episode. And B.) that the brand most at risk is Google. And it’s not just because of AI. In fact, there are four big threats that Google faces.

Plus a bonus threat that I’m going to tell you about in a minute. But the four big threats are artificial intelligence, obviously, competition, antitrust, and privacy. I’ll talk about each of these in order and then come to the bonus threat. But I want to start with artificial intelligence. AI is clearly a huge opportunity for Google.

It is a massive opportunity for them to increase their market share and make even more money than they do today. It’s also a big threat. And it’s a big threat for a very specific reason. The reason is that it’s very tough for them to monetize AI today. And you don’t even need to think about this from Google’s point of view.

You can look at this from the other AI companies and their, their inability to profitably monetize what they do because the cost of making AI work is so expensive. It’s just that Google has it much worse because they already make a lot of money. Bright Edge has research, that I will link to in the show notes, that shows Google isn’t displaying its AI overviews features on searches that make the most money for Google.

Why? Well, I believe it’s because they haven’t figured out how to get customers to click on ads when Google has already provided a good answer. Google’s going to make somewhere over $300 billion this year in revenue. And roughly 57 percent of that comes from search ads. I usually round the revenue down to %300 billion and their revenue percentage up to 60% to call it an even $180 billion in revenue from search. It’s just an easy number to hang on to. If they give customers, if Google gives customers great answers that don’t require searchers to click on their ads, Google stands to lose a tremendous, tremendous amount of money. At the same time, it’s tough for them to avoid including AI in their search results.

Why? Well, because then customers may switch to services that give them better answers and better experiences. Right? People don’t go to Google because they want to go to Google. They go to Google because they want an answer to the question. Whether that’s a site that the Google links to, or whether that’s just a flat out answer.

If ChatGPT or Microsoft Copilot or Perplexity or Claude or someone like that gives customers a great answer and Google is unwilling to because they’re afraid of hurting their revenue streams, then people could switch. I talked about this in an episode a couple of weeks ago, which I will link to in the show notes.

At least on paper, though, Google is trapped in a classic innovator’s dilemma. Move too fast towards the new thing, and they undermine their entire revenue stream. Move too slowly, and they could see existing customers switch to a new competitor, and then Google would lose its revenue stream anyway. That’s, you know, not a great place for them to be.

Which brings us to the second big threat, competition. Google is probably seeing more competition today than they’ve seen in decades. I mean that sincerely. Decades. Not years. Decades. Think in terms of their competition, not as traditional search engines like Ask or, you know, Yahoo, necessarily. Instead, I think in terms of where customers get their information.

Remember, Google gets almost 60 percent of their revenues and probably 100 percent of its profits from search ads. Every time a customer gets their information somewhere other than Google, that’s potential lost revenue for Big G. If they make $180 billion in revenue from search ads, even a 1% decline in search volume equals a loss of $1.8 billion.

That’s a huge sum of money. If my back of the envelope calculations relying on census data are right, only about one one hundredth of one one percent only one one hundredth of one percent of companies in the United States make more than a billion dollars per year. Google could lose that amount of money with less than a one percent swing in its revenues.

That’s insane. Like, that’s impossible to get your mind around easily. And Google faces competition from a wide variety of sources. First, coming from the AI players, you know, OpenAI and ChatGPT, Microsoft Copilot, Perplexity, Claude. They obviously continue to face challenges from traditional vertical search engines like Amazon or Booking.com or Indeed or Zillow. Google and each of these are improving their capabilities using AI. And then there’s some competition for search coming from social. You know, Facebook and Instagram’s meta AI experience. So again, AI working on this. And TikTok with just over 40 percent of its users saying they have searched and they like to search on the social platform.

And these sites also benefit from, say it with me, artificial intelligence capabilities. And then, of course, we have some of the more traditional general search engines like DuckDuckGo that focus on privacy. More on that in just a moment. It wouldn’t take much shift for Google to feel genuine pressure.

All they’d have to do is fail at making good product choices or take their eye off the ball. And one thing that might cause them to take their eye off the ball is the next big threat, which is antitrust. I’m going to say this right up front, I actually don’t think antitrust is going to be a major factor in the next year. Probably. It’s going to take probably until 2027 or longer to play out in practice. I’m not the one saying this. Reuters has said this in the existing antitrust trial that’s going on right now around Google and search; there’s also a whole ad tech one, but I’m going to put that aside for the moment.

The government and Google are submitting documents to the court explaining how to remedy their monopoly behavior, Google’s monopoly behavior, by the end of 2024. The court will then hold a brief trial in April of 2025 to let Google and the Department of Justice argue their points. And then the court will issue its ruling in August of 2025.

After that, Google will appeal. Remember, they’ve already lost the first trial. This trial in April is just to determine what the penalties are. Google will appeal as soon as the judge issues, uh, his ruling in August of 2025. And they’ll probably appeal all the way up to the Supreme Court because they can’t afford to lose this case.

All of this also ignores the possibility that a new presidential administration and a new Attorney General could just choose to back off the case. Stranger things have happened. Um, I had an episode about the antitrust trial a few weeks ago. Again, I’ll link to it in the show notes. But we know because of the various appeals that this is going to take us well into 2026, if not 2027, if not further out than that.

So it doesn’t worry me a ton for 2025, unless Google lets it distract them. The bigger distraction for them is our fourth threat, which is privacy. Now, when most people think of privacy, they tend to think of regulators. I would put myself in that category. I would say, though, in this case, it falls into the same bucket as antitrust with a big wild card.

After the election later this year. Multiple states and other jurisdictions could pass laws increasing privacy regulation. Already 19 states, plus the EU, Canada, and a host of other countries around the world, have laws that are either in effect or will take effect in 2025. They have laws on the books that that’s going to happen.

Google is okay at handling this. I think they’re going to manage that. Pretty easily. Instead, what I’m concerned about, or what I’m questioning, is if all the attention from regulators and from legislators passing these laws and promoting these laws will cause consumers to think more about privacy, and if so, will that cause them to

And that’s really what leads to the bonus threat, the fifth threat, which is changing customer expectations. Now this is tough to gauge. So far, we’re not seeing it. Um, if you look at the data from places like SimilarWeb, Where you look at the data in terms of where people are getting traffic to their websites today, Google’s still pretty much the dominant player.

At the same time, it could change on a dime. Customers can be fickle. And switching costs away from Google are effectively zero. Google’s users could start searching on ChatGPT or Bing or Perplexity or DuckDuckGo tomorrow relatively easily. They just have to type in a new address to their web browser.

The big blockers that I see to that is that most of the growth on search, in search, continues on mobile right now. That’s where we’re seeing most of the growth. And most people don’t switch from the default search engines. You open up your browser, you type in the search in the address bar, and it just goes to Google.

Obviously, Google is going to be the default on Android. And Google pays Apple billions of dollars to remain the default there. That actually was a major component of the antitrust trial Google just lost. Hell, Apple’s Eddie Cue said Apple wouldn’t switch from Google even without pay because Google is so much better than every other option. The judge in the trial said that Google is better than so many, every other option, which is how they established a monopoly in the first place. This could change. I’m just not seeing that happen yet.

I cannot emphasize enough how quickly I could end up being wrong here. It’s not like everyone has to go buy a new computer, or a new phone, or a new device to use something other than Google. They just have to type a different address into their browser. If we all woke up tomorrow and wanted to use something other than Google, it would be remarkably simple. That’s the fact about this that keeps me up nights. And if you think this is ridiculous, you think there’s no way that happens, I’d point out that Microsoft had 90-plus percent market share for computer operating systems as late 2008, almost two full years after the iPhone came out. So, this can change quickly.

Now one of the questions I would ask you to think about right now, is how much would you bet on these? How much would I bet on each of these? And I’ll tell you, for AI, by far, the most. I’d bet a lot that AI forces Google to change its product even more than it’s done so far. Frankly, it’s among the top things I’m working on with my company and on behalf of our clients. So in a sense, I’m betting a fair share of my company’s revenues on this one. I’m really confident we’re going to see major changes to the product set over the course of the next year.

In terms of competition, I’d bet a bit, maybe $250, maybe $500, that within a year, Google loses at least some small amount of market share to one or more competitors. I don’t think they’ll lose a lot of market share. But remember, each point of market share is roughly $1.8 billion to Google’s top line. That’s not nothing, and I think it’s plausible, if not downright possible.

On antitrust, yeah, no bet, no way. Too many variables, too many unknowns, too long a timeline, and I just don’t think much happens next year that matters in real terms.

Privacy? Eh, I might bet a little bit on this one. I might bet a hundred bucks that it hurts them. Maybe. I’m not super convinced. But I’d say privacy gets its hearing in 2025 and Google responds in some sense. And we’ll see where we go. As for customer behavior, well, I’ve already bet on this one in a sense.

I’ve said that Google will lose at least some small amount of market share. They can’t lose that share if customers don’t switch. So, put this one in the same boat as competition. In fact, if we’re being frank, it’s tough to pull these apart. If even a small share of customers switched to using, for instance, DuckDuckGo or ChatGPT, it might be tough to tell whether it was because of privacy, a better search experience, concerns about Google’s monopoly, or some combination of all of these.

That’s why I think it’s likely and why I’m willing to bet That Google does in fact lose some market share. There are enough factors against them that makes it seem unlikely that they won’t feel some effect. I don’t expect a large shift. That doesn’t mean I expect no shift at all. And that’s something we’re going to pay a lot of attention to over the course of the year.

Keep in mind, Google is still massive and I can’t imagine that they lose majorly in 2025. Notice, in none of these did I say Google’s going to give bad answers or customers are going to stop searching.

Yes, competition is increasing. Yes, I’ve also heard some rumblings that people are somewhat dissatisfied with the results.

But Google hasn’t yet shown that it’s losing much in the way of traffic, much in the way of market share, or much in the way of revenue, at least not yet. But it is something that I’m going to watch closely over the course of the coming year in quarterly earnings from Google and the rest of Big Tech. And in fact, I’ll have an update on that by the end of the month, by the end of November.

The point is, in all of this, is what do you do about it?

Well, first, it’s time to start planning in case Google does take a hit. Don’t let Google’s problems become your problems. You need to start thinking about diversifying your source of traffic.

I will go ahead and give a link in the show notes to a two part episode I did on the Core methodology earlier this year for diversifying your traffic. You should be planning today to not be so dependent on Google. It doesn’t mean you want their traffic to shrink. It means you want the other sources to grow faster.

You should test the various tools out there for yourself and see which ones you like and whether any work better for you, because if you find they work better, your customers may find they work better too.

You need to pay attention to your analytics to see if you see a decline in Google traffic, which might be happening anyway due to the volume of the growth in volume of zero click search results. If you’re already losing traffic from Google, you need to think about how you diversify where your traffic comes from.

Next, you should listen to what your customers are saying about their behaviors and whether they’re changing what they do. You should also keep learning. Obviously, here at Thinks Out Loud, we’ll keep working on this topic to help you be ready no matter what happens.

So yes, there are four-plus big threats that Google faces. There are artificial intelligence, competition, antitrust, privacy, and a potential shift in customer behaviors. Your job is to make sure that no matter what happens that those don’t become threats to you, too.

Show Wrap-Up and Credits

Now, looking at the clock on the wall, we are out of time for this week.

And I want to remind you again that you can find the show notes for this episode. As well as an archive of all past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 436.

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Show Outro

Finally, and I know I say this a lot, I want you to know how thrilled I am that you keep listening to what we do here. It means so much to me. You are the reason we do this show. You’re the reason that Thinks Out Loud happens every single week.

So please, keep your messages coming on LinkedIn. Keep hitting me up on Twitter, sending things via email. I love getting a chance to talk with you, to hear what’s going on in your world, and to learn how we can do a better job building on the types of information and insights and content and community that work for you and work for your business.

So with all that said, I hope you have a fantastic rest of your day, I hope you have a wonderful week ahead, and I will look forward to speaking with you here on Thinks Out Loud next time. Until then, please be well, be safe, and as always, take care, everybody.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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