“From now on, the [gross margin] of search is going to drop forever,” Nadella said in an interview with the Financial Times.
“There is such margin in search, which for us is incremental. For Google it’s not, they have to defend it all,” he added, referring to the competition against Google as “asymmetric”.
Because my understanding is that about 60% of Google's total revenue is search ads, and if you include network ads (which would be relevant since they are at risk from AI as well) then it is more like 70%.
No, it's not mixed. It's related to the saying about the people who get rich off a gold rush being the ones who sell shovels. In the buggy-whip case, it's about a company not understanding the market changing entirely to make them obsolete. The transportation market moved to cars, and so nobody needs a buggy whip.
The original reference is probably Levitt's "Marketing Myopia" (https://books.google.com/books?id=Zn4foOUm3AoC). Levitt uses it to illustrate that companies should focus on customers rather than products.
Note the imprint, "Harvard business review classics." What I linked to is a 2008 republication of a book from 1975. The buggy-whip analogy also appears in a journal article of the same name by the same author in 1960. More info here: https://hbr.org/2016/08/a-refresher-on-marketing-myopia
I'm surprised that a court-proven antitrust violator Microsoft would speak so openly about abusing it's dominant position in a different business to finance dumping a different product at low price to destroy a competitor.
I was surprised as well for the same reason.. but then I thought about how Google has directly attacked Office, Windows, and Windows Mobile in a pretty similar way.
Anecdotally, after the first wave of excitement I don’t know anyone who still uses Bing chat. The value add in chat-augmented search isn’t huge IMO, and forcing the use of Edge doesn’t help.
I find lots of value in chat-augmented search. But, Bing is not ready yet. It is slow, hallucinates, only vaguely cites its sources and is therefore not trustworthy.
On the other hand, I am really happy with https://phind.com and find myself using it if I struggle to understand some concept.
For me, the power of the chat based apps is that I can explain my mental model and they can directly build upon that.
I still use Google, but sometimes I use ChatGPT where I may have used Google.
But having said that we are still early. If ChatGPT gets access to current information and can quote sources, pull out pertinent parts of web pages,
etc then I might stop using Google.
That would be like a restaurant that lets you eat then leave with your weekly
shop but at costco prices.
I feel like my Google searches are too short and precise in general; if I were to try getting the same information from an informal AI chat, it's a huge loss of productivity and efficiency I'd imagine.
Google: "<local restuarant>" = Full page of information including reviews, links to order delivery, directions, etc. All in a standard UI that doesn't change from restaurant to restaurant. Muscle memory takes over.
ChatGPT: "Tell me about <local restaurant>" = Blurb of text that may or may not be useful.
People, including myself, have asked Google a lot of straight-up questions over the years, and those use cases match well with generative AI. But the overall point of a search engine is to find something on the internet, and I don't think that's going to go away.
