American multinational technology conglomerate holding company Alphabet has seen its stock price decline as much as 4% on Monday, following Samsung’s plan to replace Google with Microsoft Bing as a default search engine for its mobile phones.
In the early hours of Monday, Google stock fell to $104.90, erasing $55 billion in Alphabet’s market cap. Microsoft on the other hand, outperformed the market, rising about one percent.
Commenting on this, analyst James Cordwell said that “Investors worry Google has become a lazy monopolist in search and the developments of the last couple of months have served as a wake-up call”. He added that the potential costs tied to making Google Search more competitive than AI-powered Bing could also be a cause of concern.
It would be recalled that on Monday, reports revealed that Samsung Electronics, a key Google partner, is considering replacing the Google search engine in its phones with Microsoft Bing. This reportedly caused panic in Google’s camp, as the tech giant which earns close to $3 billion in annual revenue from the contract with Samsung is concerned about being replaced.
Investors King understands that Samsung’s choice to use Microsoft Bing as its default search engine might be a result of its growth in the search engine industry which saw it incorporate an AI-based Bing Chatbot to enhance users’ experience, which has been gaining more users since the start of the year.
While Microsoft has integrated the artificial intelligence technology behind ChatGPT into its product, Google’s debut of its new chatbot, Bard underwhelmed during a February presentation.
Google strongly believes that Samsung’s preference for Microsoft Bing as the default search engine for its devices is because of the AI features it offers. Therefore, reports reveal that Alphabet is currently working hard to defend its market share, with a team of more than 160 people working to incorporate artificial intelligence into its Google search product.
The tech giant is doing everything possible to catch up with its rival Microsoft in the adoption of A. I service. The threat to Google’s search engine dominance is reportedly pushing the company to revamp its search products, including creating an entirely new A. I powered search engine.
While talks between Samsung Electronics and Google continue, the potential of Samsung Electronics moving to Bing as the default search engine underlines the significance of alliances and competition in the digital sector. If Samsung moves to Bing, Microsoft might make a significant breakthrough in the search engine sector, which Google has long dominated.
