Google processes 14 billion searches daily, holding 93% of the global search engine market. This engine generated $50.7 billion in Q1 2025 search ad revenue. That dominance now faces emerging threats as AI tools reshape how users access information online.
OpenAI’s ChatGPT handles 37.5 million queries daily. Though small by comparison, usage is growing fast. Between December and February, its weekly user base surged from 300 million to 400 million. OpenAI aims to hit one billion by year-end.
Google’s model relies on sponsored clicks. AI chatbots disrupt that, offering direct answers without blue links or page visits. The shift reduces the need to scroll or engage with traditional ad formats.
Alphabet’s Q1 2025 Total Revenue
Users Adopt Chatbots for Search-Like Tasks
ChatGPT now commands 0.25% to 2.1% of global search-like traffic. That figure is up 740% year over year. While still modest, the growth trend is accelerating. Analysts warn that a 5–10% drop in search traffic could cut billions from Google’s ad revenue.
Younger users lead the adoption of chat-based tools. Their familiarity with AI interfaces points to lasting behavioural changes. These trends could reshape how people search, shop, and interact with content.
Google Responds with AI Overviews and Gemini
Google has released AI Overviews to deliver direct answers in search results. It also launched Gemini, its own AI chatbot, to compete with emerging rivals. These tools aim to retain users while meeting new expectations.
The strategy raises a concern. AI summaries reduce space for ads. If users don’t scroll, click or explore pages, Google’s revenue streams face risk.
This creates a core dilemma. Google must innovate without undermining the model that drives its profits.
Stock Remains Stable, But Signals Shift
Alphabet stock shows resilience despite the shift. The company retains a Strong Buy rating, with an average price target of $202.57. That marks a potential 22.62% upside.
However, investors face growing uncertainty. AI agents are altering user pathways, compressing time spent in traditional ad-supported ecosystems. Platforms must adjust or risk obsolescence.
Alphabet Inc. stocks in Last 24 hours
Marketers Rethink Strategy as AI Matures
Despite rising AI adoption, many marketers remain cautious. A Gartner survey of 400 marketing leaders found 27% had little or no use of generative AI. Many focus on near-term consumer needs rather than future scenarios.
Gartner analyst Noam Dorros said, “You still have to focus on what’s three feet in front of you, which is your consumer, and understand their behaviours and their needs.”
Search Market Sees Decline in Google Share
StatCounter data shows Google’s global market share fell to 89.65% in April, its lowest since 2013. In the US, Google’s share was 86.71%. Bing followed with 7.5%, Yahoo with 2.86%, and DuckDuckGo with 2.3%.
Meanwhile, Google’s AI Overviews now attract 1.5 billion monthly users. Startups like Perplexity saw monthly searches rise from 2.5 million in January to 20 million by December.
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AI Agents Threaten Ad Exposure
AI agents reduce exposure to ads during key purchase stages. An eMarketer report estimated drops of 38% in discovery, 47% in consideration, and 30% in conversion. Marketers are responding by shifting focus to optimised content, product feeds, and AI integrations.
Some brands now experiment with ads inside chat platforms. Microsoft rolled out new formats within its Copilot platform, targeting categories like retail, travel, and finance.
Consumers Show Mixed Trust in AI
Bain & Company found that 80% of U.S. consumers use AI-generated content for 40% of their searches. Trust varies by use case. 56% trust AI for learning, and 51% for shopping. Trust drops to 34% for health, 32% for finance, and 29% for news.
Companies like Visa and Mastercard are moving fast. Visa launched “Intelligent Commerce,” and Mastercard introduced “Agent Pay.” These systems let AI agents assist or complete purchases.
AI Agents Redefine Online Interactions
Advanced AI agents are emerging across platforms. Google is developing Mariner, OpenAI revealed Operator, Amazon tested Nova Act, and Perplexity will release Comet this month. These agents combine browsing, research, and commerce features.
Enders Analysis reported OpenAI agents doubled their performance on the “Humanity’s Last Exam” benchmark. Success rates rose from 13% to 26.6% through browsing and coding tools.
Wharton Study Offers AI Chatbot Blueprint
A new Wharton report outlines chatbot strategies for trust and personalisation. It found people were 2.6 times more likely to accept higher prices from AI than humans. Users also avoided human-like bots for sensitive purchases.
Stefano Puntoni said, “Flattery is quite effective, but what we found is the problem with flattery is it works as long as people are not overly aware of the fact that it is flattering.”
Outlook Points to Accelerating Change
AI agents are becoming intermediaries in digital journeys. They challenge established advertising models and force companies to adapt. Google, Alphabet, and their rivals now face a high-stakes pivot as AI transforms user behaviour.
