[rdsubhas]

Big companies drag themselves down – not because they can't innovate – but because they can't go "all in" into innovations which compete against their real cash cow.

An AI assistant fundamentally hits at Google's gut: Search ad revenue. Yeah, Google can make dozens of AI demos. Are they truly ready to put Gemini as the default interaction model, pitting it against their search? Can they give super accurate answers to questions, without the potential of 3 sponsored results on top, in such a way that it would make their search obsolete?

Shareholders "wish" to see competitive demos, to not be left behind, etc. But are shareholders & market ready for a 10% balance sheet revenue drop that comes with making an AI assistant a go-to product instead of search?

AI in Google could end up getting crippled, not by design, but by the environment and "thou shalt not touch search revenue" constraints under which it operates in.

It would be interesting if Alphabet (and Alphabet's moonshots) totally distances itself from Google instead of being an internal structure sharing the same tickers, and treat Gemini as an all-out cannibalistic competitor to Google.

[jillesvangurp]

Their ad revenue is a local optimum. They could reach new highs with alternate business models but only at the cost of short term reduction in revenue from ads. And this is of course risky. So, they keep on dancing around the topic without ever committing to anything.

An additional problem they have is that running AI at scale is super expensive. Even for Google. Add to that legal risks, pressure from regulators in different countries, privacy concerns, copyright issues, etc. and you get a whole lot of risk and friction. Add to that the usual organizational infighting and politics and you pretty much have a company incapable of doing anything.

[Mattasher]

> They could reach new highs with alternate business models but only at the cost of short term reduction in revenue from ads.

Yes. Long term, if you control peoples attention and their flow of information, you will almost certainly figure out a way to control their pocketbooks.

[lelanthran]

> An AI assistant fundamentally hits at Google's gut: Search ad revenue.

I understand this argument, having made it multiple times in the past - any development at google that threatens the cash cow will, ultimately, go nowhere. Why, after all, would they spend money developing something that reduces their income.

After a little bit of thinking about it, I offer an alternate future for google+AI: the AI improves their ad relevancy to such a degree that it makes google search more valuable, not less.

With all the data they have on each individual using their search, it is not inconceivable that that data + an inferior model beats out a superior model that has less context.

[hightrix]

> the AI improves their ad relevancy to such a degree that it makes google search more valuable, not less.

More valuable to who? In this case it seems like more relevant ads increases the value of Google Search to advertisers but not necessarily users.

If, as a user, I see ads that are more directly targeted at me, that is a negative value in a search engine. I never want targeted ads. I only want to see what I searched for.

That said, for the small minority of users like me, Google may never be able to overcome their “advertising company” label. And that label is an instant black list.

[lelanthran]

> > the AI improves their ad relevancy to such a degree that it makes google search more valuable, not less.

> More valuable to who?

To the paying customers - advertisers.

> In this case it seems like more relevant ads increases the value of Google Search to advertisers but not necessarily users.

So? Google doesn't care about its users, and hasn't for a very long time now.

Google became profitable purely because they delivered the most value to advertisers, by way of having the most eyeballs. More relevant advertisements are not going to reduce the number of eyeballs that google sells.

> If, as a user, I see ads that are more directly targeted at me, that is a negative value in a search engine.

And those users will be lost in the noise, a statistical rounding error, if that. Losing unprofitable users helps Google become even more profitable.

[hutzlibu]

"Are they truly ready to put Gemini as the default interaction model, pitting it against their search?"

Probably not, since they have not figured out, how to integrate the ads into the AI.