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Japan Today
22-05-2025
- Business
- Japan Today
Ads pressured to evolve as AI changes Google search
As Google tests weaving ads into its new AI Mode online search it remains to be seen how well marketing messages will be clearly and smoothly worked into results By Glenn CHAPMAN As Google races to lead in artificial intelligence, it faces the challenge of making sure the technology doesn't slow its profit-pumping advertising engine. The internet giant is dabbling with ads in its new AI Mode for online search, a strategic move to fend off competition from ChatGPT while adapting its advertising business for an AI age. "There's no question that AI is becoming more commonplace as a source for answers," IDC advertising and marketing technology research director Roger Beharry Lall told AFP. "That will inevitably result in a shift in terms of search and the opportunities to promote a brand." The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages. However, advertising remains Google's financial bedrock, accounting for more than two-thirds of its revenue. "Google certainly needs to find a way to monetize AI search in the way that it has monetized its past versions of search," Techsponential analyst Avi Greengart told AFP at the tech giant's annual developers conference this week. A new AI Mode enables conversational interaction with Google during search queries, providing answers in diverse formats, such as video, audio or graphs. The internet giant said it is testing integrating ads into AI Mode responses, building on insights gained from AI-generated summaries, or "Overviews," introduced to search results a year ago. These Overviews display comprehensive AI-generated summaries of results above traditional website links and ads. "The future of advertising fueled by AI isn't coming — it's already here," stated Vidhya Srinivasan, Google's vice president of Ads & Commerce. "We're reimagining the future of ads and shopping: Ads that don't interrupt, but help customers discover a product or service." Google is extending ads in AI Overviews to desktop in the U.S., following successful mobile implementations. More than 1.5 billion users see AI Overviews monthly, according to the company. "Google's doing very good job of adapting," Beharry Lall said. "The move right now is to experiment and to gain traction, just as they have." Google's aggressive push into generative AI intensifies its competition with OpenAI's ChatGPT, which added search engine capabilities to its popular chatbot. Google announced it is making AI tools available to streamline the creation of online ads, mirroring similar initiatives by Facebook-owner Meta, Google's primary rival in online advertising. New features, available in the United States, will enable merchants to leverage AI for effective marketing campaigns and to "power an algorithm capable of targeting new searches and generating additional conversions," Google said. "AI helps a lot in advertising as far as targeting customers more precisely," Creative Strategies analyst Carolina Milanesi told AFP. Google should have opportunities to charge for AI tools for ad campaigns, and even for insights from data the tech firm has about its users' lives. "When you have AI agents doing things for you, those agents are going to need data," Milanesi said. "To get access to that data, you're going to have to pay." For example, Google knowing the kinds of restaurants or places someone has searched for online would have value for targeting ads, she said. Making money from AI tools and data could help Google diversify revenue sources at a time when its ad business is under pressure from regulators, according to Milanesi. "There could be entirely new business models around how a brand connects into those AI results," said Beharry Lall. "In the long run, it's going to be additive and beneficial to Google." How Google and other platforms make clear the difference between paid messaging and organic results generated by AI "is going to be the $64 million question," Beharry Lall said. "It'll be incumbent on regulatory bodies to develop guidelines," the analyst said. © 2025 AFP
Japan Today
03-05-2025
- Business
- Japan Today
Apple eases App Store rules under court pressure
Analysts don't expect letting developers link to payment platforms outside the App Store to be a major hit to revenue generated by Apple's services business By Glenn CHAPMAN Apple has relaxed its App Store payment rules in the face of a scathing court order, with Spotify quick to reap the benefit. Apple's update to its App Store guidelines let developers know they could now provide links to outside payment platforms, allowing people to buy apps featured in its U.S. online shop without paying through the App Store. The rule change came just two days after a U.S. judge accused Apple of defying an order to loosen its grip on the App Store payment system to the point that criminal charges could be warranted. Music streaming giant Spotify said Friday that Apple had approved an update "that will finally allow us to freely show clear pricing information and links to purchase" in its app in the U.S. App Store. "In a victory for consumers, artists, creators, and authors, Apple has approved Spotify's U.S. app update," the Sweden-based service said in a post on X. "Today represents a significant milestone for developers and entrepreneurs everywhere who want to build and compete on a more level playing field." Epic Games chief executive Tim Sweeney shared the Spotify post along with a message of congratulations for it "being the first major iOS app to exercise its court mandated right to do digital commerce with customers free of Apple obstruction, interference, and the Apple Tax!" U.S. District Court Judge Yvonne Gonzalez Rogers found that Apple "willfully" violated an injunction she issued at trial, with the company instead creating new barriers to competition with the App Store and even lying to the court in the process. Gonzalez Rogers ordered the injunction be enforced. An Apple spokesperson told AFP it strongly disagrees with the judge's decision and will appeal to a higher court, but would comply. Fortnite-maker Epic launched the case in 2021 aiming to break Apple's grip on the App Store, accusing the iPhone maker of acting like a monopoly in its shop for digital goods and services. After a trial, Gonzalez Rogers ruled that Apple's control of the App Store did not amount to a monopoly, but that it must let developers include links to other online venues for buying content or services. Apple's response to the trial order included new barriers and requirements including "scare screens" to dissuade people from buying digital purchases outside of its App Store, the judge concluded. "Apple's 15-30 percent junk fees are now just as dead here in the United States of America as they are in Europe under the Digital Markets Act," Sweeney said in a post on X. The act, which went into effect last year in Europe, requires Apple and other U.S. tech giants to open up their platforms there to competition. Apple has made a priority of building up its services business as the Silicon Valley titan tries to reduce its reliance on iPhone sales for revenue. The unit, which includes Apple's television and music streaming services along with iCloud data storage and App Store income, now accounts for more than a quarter of the company's revenue. The App Store changes include letting app makers use alternate payment systems free or charge or commission, according to Apple. "Whatever revenue Apple was getting, it is not worthwhile for them to continue to look as if they don't have the developers best interest at heart," said Creative Strategies analyst Carolina Milanesi. Apple will be courting app makers at its annual developers conference in June. "There's still a lot of revenue coming in from subscriptions, iCloud and more, so this is not the end of the App Store being a good source of revenue for Apple," Milanesi said. Most apps in the App Store make their money from ads, and Apple shares in that revenue, according to the analyst. "And for smaller developers, the App Store is still the best way to reach consumers without having to invest the kind of money that an Epic Games or Spotify can invest in setting up alternative payment methods," the analyst added. © 2025 AFP
Japan Today
21-04-2025
- Business
- Japan Today
U.S. urges curb of Google's search dominance as AI looms
Google contends the US is overreaching by asking a federal judge to order it to sell its popular Chrome web browser By Glenn CHAPMAN U.S. government attorneys urged a federal judge Monday to make Google spin off its Chrome browser, arguing artificial intelligence is poised to ramp up the tech giant's online search dominance. The Department of Justice (DOJ) made its pitch at a hearing before District Judge Amit Mehta, who is considering "remedies" after making a landmark decision last year that Google maintained an illegal monopoly in online search. "Nothing less than the future of the internet is at stake here," Assistant Attorney General Gail Slater said prior to the start of the hearing in Washington. "If Google's conduct is not remedied, it will control much of the internet for the next decade and not just in internet search, but in new technologies like artificial intelligence." Google is among the tech companies investing heavily to be among the leader in AI, and is weaving the technology into search and other online offerings. Google countered in the case that the United States has gone way beyond the scope of the suit by recommending a spinoff of its widely used Chrome, and holding open the option to force a sale of its Android mobile operating system. The legal case focused on Google's agreements with partners such as Apple and Samsung to distribute its search tools, noted Google president of global affairs Kent Walker. "The DOJ chose to push a radical interventionist agenda that would harm Americans and America's global technology leadership," Walker wrote in a blog post. "The DOJ's wildly overbroad proposal goes miles beyond the Court's decision." The DOJ case against Google regarding its dominance in internet search was filed in 2020. Judge Mehta ruled against Google in August 2024. Google's battle to protect Chrome renewed just days after a different U.S. judge ruled this month that it wielded monopoly power in the online ad technology market, in a legal blow that could rattle the tech giant's revenue engine. The federal government and more than a dozen U.S. states filed the antitrust suit against Alphabet-owned Google, accusing it of acting illegally to dominate three sectors of digital advertising -- publisher ad servers, advertiser tools, and ad exchanges. The vast majority of websites use Google ad software products that, combined, leave no way for publishers to escape Google's advertising technology, the plaintiffs alleged. District Court Judge Leonie Brinkema agreed with most of that reasoning, ruling that Google built an illegal monopoly over ad software and tools used by publishers, but partially dismissed the argument related to tools used by advertisers. "Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising," Brinkema said in her ruling. The judge concluded that Google further entrenched its monopoly power with anticompetitive customer policies and by eliminating desirable product features. Online advertising is the driving engine of Google's fortune and pays for widely used online services like Maps, Gmail, and search offered free. Money pouring into Google's coffers also allows the Silicon Valley company to spend billions of dollars on its artificial intelligence efforts. Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed. Google said it is appealing both rulings. © 2025 AFP
