Jakub Porzycki | Nurphoto | Getty’s paintings
Alphabet shares fell greater than 2.5% on Monday after The Recent York Times reported that Samsung is considering ditching Google because the default search engine on its phones in favor of Microsoftis Bing.
Microsoft shares closed down about 1%.
Google pays billions of dollars a yr to phone makers, including $20 billion a yr to Apple, to serve because the default search engine. In return, the search company collects billions of dollars from promoting, which has long been Google’s profit center.
The Samsung-Google deal is about to be renewed, the Times reports, and is price an estimated $3 billion in revenue to Google. Samsung is a serious manufacturer of Android, and the news that Samsung is considering a switch has reportedly taken Google employees by surprise.
“Wow, OK, that is crazy,” one Google worker reportedly responded to the message.
Google has over 90% of the search market share, in keeping with StatCounter, and is in the midst of a contentious battle with the Department of Justice for search engine supremacy. The Department of Justice focused on Google’s apparent pay-to-play model, to note that paying to take care of the default status has “harmful effects on competition and consumers”.
Microsoft’s Bing has been lagging behind Google for years. But Bing has seen a spike in interest with the launch of its AI chatbot, which is predicated on OpenAI’s GPT model. CNBC previously reported how the launch of each Bing Chat and OpenAI’s ChatGPT prompted Google to reply “all by the hand.”
Samsung and Microsoft have a well-established partnership. For instance, Microsoft Office applications come pre-installed on Samsung phones, and Samsung phones have built-in software that makes it easy to attach them to Windows computers.
It’s unclear if Microsoft could be willing to pay the identical price as Google. Microsoft relies much less on search and promoting, and derives much of its revenue from cloud and enterprise solutions.
Samsung’s reported reassessment could also be a moot point, nevertheless, as Google looks to integrate its latest AI chat technology, Bard, into search as early as fall.
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