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By ditching Search, Samsung may make Google get its act together

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Last updated: April 17th, 2023 at 20:03 UTC+02:00

Google Search has absolutely dominated the internet for decades now. Such is Google's dominance that its name has become a verb – when you ask someone to look up something online, you'll tell them to just “Google it.” There have always been other search engines and it's true that Google has objectively been better than them.

The Alphabet-owned company has gone to great lengths to preserve its ubiquity. It certainly doesn't hurt that its search engine is a global household name. The company has also sought out synergies that have supported this dominance. For example, Google is the default search engine on most of the billion-plus Android devices across the globe. Most even ship with a Google Search widget on the home screen.

It's also the default search engine on Google Chrome, the world's most popular web browser with a global browser market share of over 65% on all device types. To put that in perspective, over 2.5 billion people use Google Chrome. The sheer scale of its presence remains unmatched and it's very difficult for any of its competitors to achieve that level.

Google also pays big money to be the default browser on platforms that it doesn't control. It reportedly pays Apple $15 billion per year to be the default search engine on more than a billion iPhones across the globe. Apple is known to be a tough negotiator and it certainly gets its pound of flesh from Google whenever this deal comes up for renegotiation. Google is happy to pay obscene amounts of money just to remain the default option because the truth is that most users don't care or even know how to change the default browser on their iOS device.

The company needs these avenues to remain open so that it can sustain and grow the lucrative ads business that is undoubtedly the bread and butter of Google. iPhone owners are typically classified as a higher income audience so advertisers are willing to pay more for that traffic. There are plenty of new $200 Android phones, including from Samsung, but no iPhones. You can best believe that Google is making more than the $15 billion it pays to Apple by selling all of the iOS traffic that comes its way.

Since Google owns the platform, it doesn't have to pay for this privilege on Android phones, including those made by its manufacturing partners like Samsung. Manufacturers can choose their preferred search engine but most just stick with Google. Samsung has done so for over a decade and it has become a lucrative source of revenue for Google Search due to the sheer number of Android devices it sells. The company shipped over 260 million smartphones in 2022 alone, all running Android with Google as the default search engine.

According to a recent report, Samsung is thinking about ditching Google Search as the default browser on its devices and switching to Microsoft Bing. Samsung phones generate nearly $3 billion in revenue for Google's search engine so the company is understandably panicked about this situation. It has reportedly asked employees to put together materials to pitch Samsung on why Google Search should remain the default option on its devices.

Bing has lived a life of obscurity in comparison to Google for the better part of a decade. Even though it's the default option on Microsoft's Windows platform and Edge browser, Bing still has a single-digit share in the market. Perhaps the lack of true competition made Google complacent or made it feel that it need to worry about Bing as much. That may have been true if ChatGPT hadn't shown the world what the evolution of online search could look like.

OpenAI’s ChatGPT isn't new technology, rather, it's a medium that lets us experience all of the work done on AI and natural language processing over the recent past. Its power became evident immediately as people flocked to the new technology. It took ChatGPT only five days to get 1 million users and merely two months after launch, it had 100 million users. Microsoft saw the potential early on and invested $1 billion in OpenAI in 2019. It has invested over $13 billion in the company and has integrated ChatGPT with its Bing search engine.

Bing now offers an interactive chat-based search experience powered by ChatGPT and it works very well. Bard is Google's answer to ChatGPT. Unfortunately, the launch didn't go as smoothly as the company would have wanted. The AI made a factual error in response to queries during the presentation. Investors didn't like what they saw and when the markets opened the next day, Google stock was down 7%, wiping $100 billion in market value.

There is concern that Google will struggle to catch up and perhaps Samsung feels this too. Samsung already has a close relationship with Microsoft and it bundles software and services like OneDrive and Office with its devices. Getting Samsung to switch to Bing would be a major coup for Microsoft. Not only would it potentially boost Bing's market share to over 10%, but it would also signal to other players that the future of online search is being charted not in Mountain View but in Redmond.

Samsung is capable of adding ChatGPT-like features to its mobile devices. We've also discussed how ChatGPT is the only thing that can stop Bixby from being a waste of space. There's a lot more value that Samsung can derive for its products and services if it hitches its wangon to Bing for the next decade.

Google may have dominated the past and as it continues to lead in the present, it's evident that the future of search is still up for grabs. Despite its constant efforts to improve the search experience, it's still common to get low-quality results, where publishers acting in bad faith have been able to game Google's system to outrank high-quality sites. Just speak to any online publisher and they'll have a long list of grievances against Google, particularly about how its archaic and often downright confusing guidelines can make it difficult to survive even as those who are obviously gaming the system thrive.

It remains to be seen if Samsung goes through with this and ends up replacing Google as the default search engine with Bing. Samsung and Google have a very close collaboration so perhaps Google may seen to incentivize its Korean partner in some other way. Samsung will use the threat of ditching Google Search to approach the negotiations from a position of strength and then extract any concessions that it really wants.

Samsung should also think about wanting to be on the right side of history. If Bing is going to play a pivotal role in the future of online search, it would be best for Samsung to get in on the ground floor. Whatever it ultimately decides, just the fact that Samsung has put this option on the table should force Google to finally get its act together. Google might feel that it's too big to fail but surely there's no appetite at Mountain View to actually test this theory.

Opinion BingChatGPTGoogle
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