Google Search is fading. The whole internet could go with it.

Mint

13 hours ago

Experience a random pain in the 21st century and an internet search usually comes before a call to the doctor. Googling 'chest pain," 'high fever," or 'skin rash" calls up a series of blue links followed by a frenzied trip across the web. A similar pattern plays out, minus some anxiety, for 'today's weather," 'restaurants near me," and 'high-yielding dividend stocks."
Roughly one in five visits to the world's top internet sites begin on search engines, according to data from analytics firm Semrush. At Wikipedia, search generates 63% of global visits. For travel site Tripadvisor, it's 58%; for local review site Yelp, it's 51%.
But internet search traffic has been falling for much of the past year as web surfers experiment with artificial-intelligence-powered search from OpenAI's ChatGPT and AI start-up Perplexity AI. So far, referrals from AI search engines have replaced about 10% of the traditional search losses, according to Similarweb data.
Google is pushing back by adding AI-powered summaries to the top of its search results, de-emphasizing its traditional blue links and thereby further reducing search traffic. May could prove to be a tipping point.
Last month, search referrals to top U.S. travel and tourism sites tumbled 20% year over year, according to the latest data from Similarweb. E-commerce companies saw their referrals fall 9%. For news and media sites, search traffic dropped 17%. The finance, lifestyle, and food-and-drink categories all saw similar types of declines on the month.
Across the web economy, the trend is clear: Search is drying up, and Google is no longer the clear-cut way to drive audiences to websites. The changes have begun to force a reckoning across various industries.
Late last month, Business Insider, a leading digital news publication, cut 21% of its staff, citing traffic drops that were 'outside of its control."
'Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever," Business Insider CEO Barbara Peng wrote to employees.
Reddit, the social-media site and source of answers to many random questions, which gets 57% of its visits from search, is making deals with AI firms and rolling out its own AI-driven search engine.
Chegg, a homework-help company, worth $15.1 billion at its peak in 2021, said earlier this year that traffic declines had given it no choice but to explore strategic alternatives, including a possible sale.
On Wall Street, no company has faced greater worries about the future of search than Google itself. Shares of parent Alphabet are down 7% on the year; the company now gets counted as a value stock in some investor benchmarks.
But Google has countermeasures. For one, it has diversified itself into a cloud-computing giant, and it's a winner in the nascent category of autonomous driving. Google itself is also no slouch in the generative-AI world, with massive resources to build and improve its Gemini large-language models.
Instead, as traditional search fades in importance, it's the rest of the internet that will suffer.
In May, monthly U.S. search traffic to Schwab.com fell for the first time in at least two years, according to Similarweb, down 14%. A year ago, search referrals to Schwab were up 179%. TripAdvisor's search tumbled 34% on the month, while Starbucks saw a 41% decline to its website. Search to Netflix, a pioneer in digital strategies, was down 23%.
The traffic conversation has the feel of the 1990s and early aughts before Google arrived and companies were still trying to figure out how to attract audiences across the World Wide Web.
Executives are talking up deals with OpenAI's ChatGPT, Perplexity, and other AI-driven search tools. 'We're partnering with AI search companies to ensure our brands show up well across customer queries," said Expedia CEO Ariane Gorin in May, 'and building new experiences to connect with travelers outside our ecosystem."
There's a long way to go. Based on Similarweb's U.S. estimates, Expedia got 88,000 referrals from AI search engines in May. It got 34 million referrals from search.
ChatGPT was something of a novelty when the model made its public debut in November 2022, generating a wave of songs, poems, and essays across the web. But the latest models, which are more sophisticated and promise humanlike reasoning, have spurred a surge of new use. ChatGPT had 500 million weekly active users in March, rising from 300 million in December. Many of them pay $20 a month for service; parent company OpenAI says it reached an annualized revenue run rate of $10 billion this month, up from $5.5 billion at year end.
Another start-up, Perplexity, has taken on Google more directly. 'A direct line to the world's knowledge—compressed, cited, and made clear," Perplexity says on its about page. 'No gimmicks. No fluff. Just answers that make sense."
(Barron's owner Dow Jones has sued Perplexity for copyright infringement.)
As AI pressure mounts on Google, the company has moved to defend its 89% U.S. market share in search. A year ago, it launched so-called AI Overviews atop Google search results, promising condensed AI-generated answers to search queries.
Those overviews, which initially appeared on a small number of searches, have been appearing more frequently. An analysis by research firm Ahrefs said that the prevalence of AI Overviews have more than doubled from March 12 to May 6.
The AI summaries have spurred debate across the internet, with publishers worried about a search query that delivers answers in a few paragraphs, with no need to click for more info. According to Similarweb data from March, searches with AI Overviews resulted in a click 23% of the time. For searches without the overviews, the click rate was 36%.
'Looking at search results that do show an AI answer, comparing that with search results that do not show an answer, we found a crazy drop-off," said Kevin Indig, a search-engine optimization, or SEO, consultant and author of the Growth Memo blog. 'This is a click killer."
Google told Barron's that third-party data offer an incomplete picture of search trends.
In February, online education platform Chegg said search trends had crushed its business. CEO Nathan Schultz told investors: 'We would not need to review strategic alternatives if Google hadn't launched AI Overviews, retaining traffic that historically had come to Chegg, materially impacting our acquisitions, revenue, and employees."
Asked for comment, the company directed Barron's to a lawsuit it filed in February against Google. It alleges that Google is using its search dominance to 'coerce online publishers like Chegg to supply content that Google republishes without permission in AI-generated answers that unfairly compete for the attention of users on the internet."
Chegg shares have tumbled 99% since 2021.
Google says its AI Overviews have improved the search experience and are being embraced by users. A Google spokesperson says that AI Overviews show more links to a wider range of sources on results pages.
'More than any other company, Google prioritizes sending traffic to the web, and we continue to send billions of clicks to websites every day," the Google spokesperson told Barron's.
In April, during Google's earnings call, an analyst asked company executives about the impact that AI Overviews was having on click-through rates. 'I don't think this is the moment to go into the details of click-through rates and conversion and so on," said Philipp Schindler, Google's chief business officer. 'But overall, we're happy with what we're seeing."
Reddit has become a battle ground and flashpoint in the argument about search's future. The stock is down 28% so far this year as investors worry about slowing user growth on the social-media site.
It's a trend the company has attributed to an evolution in search. The company remains a standout in search, and it points out that 'Reddit" is the No. 6 searched term on Google. Still, traffic trends have notably shifted in recent months. In May 2024, Reddit's search referrals soared 78%, according to Similarweb. This past May, searches to the site were up 14%.
Reddit's daily user growth, meanwhile, has gone from 37% in the first quarter of 2024 to 31% in 2025.
Reddit Chief Operating Officer Jennifer Wong said in an interview with Barron's that search is under 'heavy construction." Wong is confident about the long-term opportunity for Reddit, noting that its human-generated content will be especially sought after to train the large language models that run AI. Reddit has a deal with OpenAI. For now, that kind of licensing is a small part of the business, accounting for less than 9% of revenue in the most recent quarter.
'Nobody knows how Google is going to cross this canyon and the kind of ripple effects that they'll have across the internet," Wong says. 'What I do know is that I think human intelligence is still going to be worth a lot, and it's going to go up and up in value, and I think Reddit is the place for that."
Wall Street generally agrees. Across 29 analysts covering Reddit, the average price target is $152, 31% above its recent close.
Going forward, investors should pay attention to a company's search exposure. Across the categories, certain brands are far less dependent on Google's referrals. Airbnb, for instance, got 14% of referrals from search in March, versus the 58% for travel firm Tripadvisor, according to Semrush. DoorDash and Uber Technologies were 13%. Social-media apps like Pinterest and Meta Platform's Instagram also tend to be far less search-dependent than much of the internet. Their sites drew 23% and 17% of referrals from search, respectively.
In May, Pinterest's CEO told investors that 85% of users come directly to the company's mobile app.
Meta Platforms, which essentially shares the online advertising pie with Google, is in an enviable position. As search traffic falls and traditional search advertising wanes, businesses will be compelled to advertise on Instagram and Facebook, Meta's social networks that are insulated from search disruption.
Meanwhile, Meta can use AI to improve ad effectiveness and personalization. As Google defends itself against AI, Meta is free to fully embrace it.
Ultimately, the best hedge against AI disruption is the company empowering it all: Nvidia. As AI explodes, Nvidia will sell more AI chips and the infrastructure to power data centers. Newer reasoning-focused AI models are particularly profitable for Nvidia because they require 100 times the computing resources compared with prior AI chatbots, Nvidia CEO Jensen Huang told investors on Nvidia's recent earnings call. 'Reasoning models are driving a step-function surge in inference demand," he said.
As Google Search comes under threat for the first time in two decades, a U.S. district judge is determining the company's fate. Judge Amit Mehta ruled in August 2024 that Google was a monopoly in general search services and general text advertising.
Alphabet and its investors are now waiting for the judge to determine potential remedies. A penalty phase of the trial concluded last month, and Mehta is expected to issue a final decision in August.
The timing is notable. Alphabet was ruled a monopoly around the same time that it was pushing out AI Overviews. Less than a year later, search is facing a massive competitive shift as users increasingly embrace chatbots.
Apple's senior vice president of services, Eddy Cue, testified that searches in Apple browsers fell for the first time in April as people increasingly turned to AI for search queries. Google pays billions of dollars to Apple annually to make its search engine the default option on Apple browsers.
But don't expect Google's recent weakness to affect Mehta's decision.
Antony Haynes, partner at Dorf Nelson & Zauderer, told Barron's that even though these new competitive threats have become more prevalent since the judge made his ruling, it's unlikely those threats will affect his decisions regarding remedies.
'We're not thinking about a remedy for potential future technology changes. We're looking at what they did in the past," Haynes said.
That past includes one of the best business models ever created. Last year, Alphabet's operating margin was 32% versus an aggregate 14% for S&P 500 index companies. Meanwhile, since Alphabet went public in 2004, the stock has returned an annualized 23.7%, versus 10.6% for the S&P 500.
A post-search world will probably weigh on those margins, but Alphabet stock already reflects the next phase. It trades at 17.8 times expected earnings for the next 12 months, below the S&P 500's 22.5 multiple.
Barron's has remained bullish on the stock, including in a November 2024 cover story and a follow-up last month.
Google will be fine. It's the rest of the internet that should be worried.
Write to Adam Levine at [e-mail], Tae Kim at [e-mail] and Angela Palumbo at [e-mail]