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One day in 2021, the Google web search team proposed an idea to the leadership that sounded novel at the time: Instead of letting the search engine just provide a cookie-cutter list of links, it would be better to have a chatbot greet visitors on the search results page and provide answers directly.
At Google, the proposal was hardly a shock, as CEO Sundar Pichai has been talking about reshaping Google parent Alphabet around AI for years. Moreover, Google also operates DeepMind and Google Brain, two of the world's most advanced AI laboratories.
A dish that’s hard to let go of
However, team management was unhappy with the proposal because few Googlers proposed changes to the search engine's basic design, according to a former employee directly involved in the discussions. "This is self-imposed limitation. People don't dare to think about these issues." The former employee said.
The department’s leaders worry that while its latest AI technology is promising, it’s still not accurate enough. Even if it works perfectly, using AI to answer user questions could upend Google's core business: combining so-called organic search links with a healthy dose of targeted advertising. The idea has been shelved, at least for now.
For more than two decades, Google search has dominated the Internet. It is the primary gateway to the Internet for billions of people. According to digital marketing firm Semrush Holdings, Google processes nearly 200,000 queries per second. About two-thirds of all website traffic comes from search engines. Search also remains Google's core business, generating more than $198 billion in revenue in 2024, accounting for nearly 60% of Alphabet's annual revenue.
Although this machine is still running, in recent years, netizens have become increasingly dissatisfied with Google. Users complain that Google's search results are increasingly filled with ads and self-serving features. Google's control of the web means that a large portion of the internet is not designed primarily for human consumption, but is instead designed primarily to serve Google's own web crawlers. Under-researched listicles or aggregated product reviews flood search results, frustrating users and taking away advertising revenue from more useful sites that don't perform well in terms of SEO. Technology critics and lawyers representing the federal government in antitrust lawsuits have long argued that Google's continued dominance despite these shortcomings is evidence that the search market is no longer competitive.
ChatGPT seizes the opportunity
Then in 2022, OpenAI’s ChatGPT was born. This chatbot is very similar to a proposal that Google management rejected in 2021. Like the earliest version of Google Search, ChatGPT only provides a simple text input area and has few other functions. It gives answers without showing ads above the real answers or providing links to lengthy recipe websites. Those sites are filled with multiple auto-playing videos, making it difficult to focus on the steps of making something like a chickpea salad. And even though its answers weren't always correct, the sheer novelty caused users to grant OpenAI a level of tolerance that might not have been available to Google, which has long dominated the search world.
What really hurts Google about the rise of ChatGPT is that it is built on Google's own inventions. OpenAI’s chatbot uses an AI architecture that was detailed in a now-classic research paper published by Google in 2017. This breakthrough technology, called a transformer, helps AI models focus on the most important information they are analyzing, and it is free and open for everyone to use. Google's engineering team has incorporated the technology into search only in the most secure ways, demonstrating the company's enormous difficulty in turning AI breakthroughs into substantive consumer products.
The impact of AI on Google itself is only beginning to be felt. Its search engine is one of the most profitable technologies of all time, and more than two years after ChatGPT launched, there are few signs that will change, even as some analysts expect Google's search revenue growth to slow in the coming years. Last year, Google earned more than $200 billion in gross profits.
Still, Google is acting urgently. A former Google employee said that after OpenAI released ChatGPT, Google redeployed more than 1,000 engineers (about 20% of the search engineering team) and asked them to invest in the research and development of generative AI (although the instructions are relatively vague). Pichai has said that AI is more important than fire or electricity. In an interview with Bloomberg Businessweek, he said that the way humans interact with information is about to undergo a complete change.
"I think we're only meeting 1 percent of humanity's information needs right now," he said. "Ten or twenty years from now, it's going to be obvious. And I think this is just the beginning, and we underestimate the potential." So this is an existential moment for Google, and it could be an existential moment for the Internet as a whole.
Change begins
In fact, before and after the advent of ChatGPT, Google had decided to break the inertia and handed over this task to Elizabeth Reid (Elizabeth Reid). Reed is a veteran Google employee who joined the search team in 2021 and took over the department in March 2024.
Since then, she has led some of the biggest changes to Google Search in years, most notably the AI Overviews feature, which gives AI-generated responses a prominent spot on the search results page. In March this year, the company said it would begin experimenting with "AI Mode" (AIMode). It's a dedicated tab on its homepage that offers a chat-based search experience similar to the one it was denied four years ago.
When ChatGPT was launched, some people who worked at Google at the time described a feeling of panic within the company. However, Reed played down the claims. Many senior Google employees still remember that when Microsoft launched its Bing search engine in 2009, it was considered an existential threat to Google. It turns out not to be the case. Most of the time, step-by-step is enough, so some people are not inclined to change the status quo.
Reed, however, was poised to enact real change. "She's very data-driven," said Brian McClendon, who worked with her on the Google Maps project and is now at Niantic. "She doesn't make changes based on hope, but if she's convinced that she has the data and she thinks another way is better, she will go all out to get there."
Reed calls her approach "continuous evolution," rather than radical change. Her team is still working to determine the role Google search should play in this new era, according to Bloomberg Businessweek interviews with 21 current and former search executives and employees, as well as more than two dozen others in the technology and media industries.
The new position makes Reed one of the most important people at Google, behind Pichai and founders Larry Page and Sergey Brin.
In his early days at Google, Reed was involved in the early development of local search, a map-related feature that allowed users to limit searches to a geographic area. Brin, who was in charge of the project, asked the team to release the feature before the desired technical infrastructure was built. This approach would never work in today’s search department. But Reed believes it was the right decision. “We learned two months in advance what people really wanted.” Reed said she believed the project taught the company a lesson about “how to experiment when you’re trying to redefine what’s possible.”
Reed has been working hard to bring that flexibility to her new role. Her team launched SearchLabs. There, enthusiasts can sign up to try out yet-to-be-released features, allowing Google to get early feedback from users before rolling out its generative AI experiments to a wider audience.
Reid predicts that the traditional Google search bar will become less important over time, voice queries will continue to grow, and Google is also planning to expand the scope of visual search applications. Rajan Patel, Google's vice president of search experience, demonstrated how parents can use Google's visual search tools to help their children complete homework, or secretly snap a photo of a stylish stranger's sneakers at a coffee shop so they can purchase the same style.
Reed said the search bar isn't going away anytime soon, but the company is moving toward a future. In this future, Google will always be running silently in the background. “The way you get information continues to expand,” she said. “It’s like you can ask Google a question just as easily as you can ask a friend, except that friend knows everything, right?”
Google recently took another step in this direction, announcing "AI Mode," which allows users to explore topics and ask follow-up questions in a conversational manner. Robby Stein, Google's vice president of search products, described the feature as a way for users to explore complex questions that aren't amenable to traditional keyword searches. Google's internal testing showed that such queries doubled in length.
This also provides Google with an opportunity to try new business models. The AI mode will first be rolled out to users who subscribe to Google's advanced AI features, a subtle but significant shift for the search engine that has always been free.
get back on track
As AI became more important, Google began to lose employees to OpenAI, Anthropic and other startups that grew faster and had more innovative products. But morale in the unit has improved as Reid's leadership has made the search unit more dynamic, according to multiple people familiar with the matter.
Pichai also touted the company's progress in reducing the cost of delivering AI answers during the earnings call. Brin also appeared regularly in Mountain View and personally recruited his long-time colleague Noam Shazeer, one of Google's most legendary engineers, to return to the company.
"What I see is a renewed energy. These early engineers are getting together again, and now they have a clear goal: they want to catch up with a certain opponent." Arvind Jain, a former distinguished engineer at Google, said.
Reed believes that Google is now on the right track. "Things always move slowly at first and then faster. Suddenly, technology, product, user experience, understanding, optimization, everything comes together, and then everyone can't live without it," she said. "It's really exciting to be involved in the search business at a time when technology can really change the way people search."
AI troubles
Meanwhile, several independent online publishers say their traffic is declining. They note that the AI Overview feature is particularly challenging because it presents information directly on Google's search results page. Previously, users would need to click through to the original website to obtain this information.
In February this year, the online education company Chegg sued Alphabet, claiming that the AI overview function was "plagiarizing" Chegg's own content, which was a wake-up call for Google. Chegg said in the lawsuit that Google's actions "could result in the public facing an increasingly unrecognizable Internet experience, where users will no longer be able to leave Google's walled gardens and will only receive artificially synthesized answers full of errors."
In response to the lawsuit, Google spokesman José Castañeda said Google will "defend these baseless accusations."