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Globe and Mail
12 hours ago
- Business
- Globe and Mail
From Search to Suggestion: How AI is Reshaping the Digital Ad Economy
What happens when the search bar disappears? That question isn't as far off as it sounds. Tools like ChatGPT, Perplexity, and Google's Gemini are already changing how people look for information online. Instead of typing keywords and clicking through results, users now ask questions and get direct answers, often with product recommendations or summaries built in. No ads, no links, and no search results page. For investors, this marks a major turning point. Digital advertising has long relied on keyword targeting and clicks. But as AI chat becomes more mainstream, that model is getting harder to rely on. Visibility now depends on whether your brand shows up in the answer at all. Companies that adapt early could gain an edge. Those who don't may be left behind. Cracks in the Search Engine Empire Online visibility used to follow a simple formula: buy some keywords, rank well in search results, and watch the traffic come in. Google and Baidu built their empires on this, while businesses poured money into SEO and SEM to stay competitive. But that model is starting to show its age. In Q1 2025, Alphabet Inc's (GOOG) core ad revenue grew by 8.5%, a slowdown from 10.6% in Q4 2024. Younger users are also skipping search altogether: nearly 40% of Gen Z now prefer TikTok or Instagram when searching for information online. Investors are already seeing the impact. Alphabet's P/E ratio has fallen from 25.57 in Q4 2024 to 19.52 as of May 2025. Baidu, Inc's (BIDU) revenue dropped 1% in 2024, ending the year at $18.24 billion. Search platforms may still dominate today, but staying relevant will mean evolving with how users discover content. The Rise of AI-Powered Discovery The way people find information is shifting fast. Instead of scrolling through search results, users are turning to AI tools like ChatGPT, Claude, and Gemini for direct answers. These systems don't just summarize, but they suggest products, services, and decisions in real time. Ask ChatGPT where to invest $500 or what the best CRM tool is, and it won't give you a list of links. It will offer a curated response based on how it processes data. Claude and Gemini do the same, bypassing traditional web rankings. That's a big change, and showing up on page one of Google isn't the only goal anymore. The real question is whether your brand appears in the AI's response. If your business depends on online visibility, it's worth understanding how to rank your website on ChatGPT, a new frontier in digital strategy. Staying discoverable in AI-generated results could soon be just as important as traditional SEO. For businesses and investors, this presents both a challenge and a window of opportunity. Ad-Tech Companies Getting Ahead of the AI Curve Some ad-tech companies aren't waiting, they're already shifting strategies to meet this moment. Why These Stocks Could Lead the Shift The Trade Desk (TTD) is moving early with Unified ID 2.0, a system built to replace third-party cookies while still allowing targeted ads. It's privacy-focused and designed for today's evolving data rules. As of late May 2025, the stock trades at a forward P/E of 43.48, far below its five-year average trailing P/E ratio of 232.63, suggesting a more reasonable valuation. Meta is using its in-house AI tools, including LLaMA 4, to sharpen ad targeting. It posted $42.31 billion in Q1 2025 revenue, beating analyst expectations. However, Reality Labs continues to weigh on results, with $17.7 billion in losses last year. Perion Network (PERI) is branching out into retail media and digital out-of-home ads, key after Microsoft changed its Bing deal, which affected Perion's search business. As of May 2025, its EV/EBITDA ratio is around 2.4, reflecting cautious investor sentiment for future growth. These companies are showing what adaptation looks like in real time. Who's At Risk? Some of the biggest names in tech still lean heavily on traditional ad models, and that could be a problem as user behavior starts to change. Alphabet continues to lead in digital advertising, pulling in $66.9 billio n in ad revenue in Q1 2025. But growth is slowing, and the company's model still depends largely on keyword-based ads, exactly the kind that become less useful when users start getting answers directly from AI. As people spend less time clicking through search results, Google's ad reach could face pressure. Baidu is in a similar spot in China. Its AI development is strong, but the business side hasn't caught up. In early 2025, overall revenue was up just 3%, and online ad sales actually dropped 6%. So far, Baidu hasn't figured out how to turn its AI tech into meaningful ad dollars. Amazon (AMZN) is a bit of a hybrid. Ad sales jumped 18% in Q1, driven by its retail platform. But while Amazon is growing fast in e-commerce advertising, it doesn't yet play a central role in AI-generated recommendations, which could become a bigger deal over time. As more users turn to AI tools for answers, these companies could see ad prices (like CPMs) dip unless they adapt their strategies for a post-search world. What Investors Should Watch Next The shift toward AI-powered discovery is still in its early stages, but the signs are already there and investors would be smart to keep an eye on them. Start with the basics: if cost-per-click (CPC) and cost-per-thousand impressions (CPM) start falling on traditional platforms like Google or Bing, it could be a red flag that attention is drifting elsewhere. Simultaneously, look for growth in AI-generated product placements where tools like ChatGPT or Gemini are surfacing brand suggestions inside their responses. Another key signal? Where the ad dollars are going. If more brands begin shifting their budgets toward 'in-AI' strategies, like optimizing for visibility inside generative answers instead of search rankings, it could mark the beginning of a much larger trend. The big picture here isn't just about better targeting or smarter data. The real prize is visibility, being the first answer a user sees when they ask a question. That's where the next digital advertising gold rush could happen. Don't Underestimate the Discovery Shift AI-powered discovery is already changing how people interact with the web. Instead of searching and clicking, users are now asking and receiving, fast, direct, and often without leaving the chat. For ad-tech companies, that's a big change, and one that creates both risk and opportunity. The players that adapt will find new ways to reach customers and unlock revenue. Those that don't may struggle to stay relevant. For investors, this isn't just about who's building the best AI models. It's about who shows up in the answer box. Because in this new landscape, the first response is the new front page of the internet.
Yahoo
a day ago
- Business
- Yahoo
Perplexity's new tool can generate spreadsheets, dashboards, and more
Perplexity, the AI-powered search engine gunning for Google, on Thursday released Perplexity Labs, a tool for subscribers to Perplexity's $20-per-month Pro plan that can craft reports, spreadsheets, dashboards, and more. Perplexity Labs is available on the web, iOS, and Android, and coming soon to Perplexity's apps for Mac and Windows. "Perplexity Labs can help you complete a variety of work and personal projects," Perplexity explains in a blog post. "Labs is designed to invest more time — 10 minutes or longer — and leverage additional tools [to accomplish tasks], such as advanced file generation and mini-app creation." Labs, which arrives the same day as viral AI agent platform Manus released a slide deck creation tool, is a part of Perplexity's effort to broaden beyond its core business of search. Perplexity is currently previewing a web browser, Comet, and recently acquired a social media network for professionals. Perplexity Labs, powered by AI, can conduct research and analysis, taking around 10 minutes and using tools like web search, code execution, and chart and image creation to craft reports and visualizations. Labs can create interactive web apps, Perplexity says, and write code to structure data, apply formulas, and create documents. All files created during a Perplexity Labs workflow — such as charts, images, and code files — are organized in a tab from where they can be viewed or downloaded. "This expanded capability empowers you to develop a broader array of deliverables for your projects," according to Perplexity's blog post. It all sounds good in theory, but AI being an imperfect technology, Labs likely doesn't always hit the mark. Of course, we'll reserve judgment until we have a chance to test it. Perplexity has increasingly invested in corporate-focused functionality, last summer launching an enterprise plan with user management, "internal knowledge search," and more. The moves could be in part at the behest of the VCs backing Perplexity, who are no doubt eager to see a return sooner than later. Perplexity is reportedly in talks to raise up to $1 billion in capital from investors at an $18 billion valuation. Sign in to access your portfolio
TechCrunch
2 days ago
- Business
- TechCrunch
Week in Review: Perplexity Labs wants to do your work
Welcome back to Week in Review! We've got a ton of stories for you this week, including a new AI-powered browser from Arc; not one but TWO hacks; Gemini email summaries; and much more. Have a great weekend! Look out, Google: AI-powered search engine Perplexity released Perplexity Labs, which gives Pro subscribers a tool that can craft reports, spreadsheets, dashboards, and more. Perplexity Labs can conduct research and analysis using tools like web search, code execution, and chart and image creation to craft reports and visualizations. All in around 10 minutes. We haven't had a chance to test it, and knowing the shortcomings of AI, I'm sure not everything will come out flawlessly. But it certainly sounds pretty awesome. Luckey's luck: The feud between Oculus founder Palmer Luckey and Mark Zuckerberg appears to be over: The pair announced a collaboration between Facebook and Luckey's company Anduril to build extended reality (XR) devices for the U.S. military. The product family they're building is called EagleEye, which will be an ecosystem of devices. Not awesome: We don't definitively know whether AI is beginning to take over roles previously done by humans. But a recent World Economic Forum survey found that 40% of employers plan to cut staff where AI can automate tasks. That can't be good. This is TechCrunch's Week in Review, where we recap the week's biggest news. Want this delivered as a newsletter to your inbox every Saturday? Sign up here. News Image Credits:The Browser Company Everyone's making a browser: The Browser Company said this week that it's considering selling or open sourcing its browser, Arc Browser, to focus on a new AI-powered browser called Dia. And it's not the only one! Opera also said it's building a new AI-focused browser, and Perplexity teased its browser, Comet, a few months ago. At last: iPad users, rejoice! You can now talk to all your international friends with the new iPad-specific version of WhatsApp. Meta says that users will be able to take advantage of iPadOS multitasking features, such as Stage Manager, Split View, and Slide Over. Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you've built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | REGISTER NOW Oh, great: LexisNexis Risk Solutions, a data broker that uses personal information to help companies spot risks and fraud, reported a security breach affecting more than 364,000 people. A LexisNexis spokesperson told us that an unknown hacker accessed the company's GitHub account, and the stolen data includes names, dates of birth, phone numbers, postal and email addresses, Social Security numbers, and driver's license numbers. And another one: Hackers reportedly accessed the personal phone of White House chief of staff Susie Wiles, obtaining contact information used to impersonate her and contact other high-ranking officials. It seems that AI was used to impersonate her voice. Can it cook my meals? Gmail users no longer have to tap an option to summarize an email with AI. The AI will now automatically summarize the content when needed, without requiring user interaction. That means you have to opt out if you don't want Gemini summarizing your stuff. Billion with a B: General Catalyst has invested $1 billion into Grammarly, the 16-year-old writing assistant startup. Grammarly will use the new funds for its sales and marketing efforts, freeing up existing capital to make strategic acquisitions. In the heights: Tinder is testing a new feature that will allow people to add a 'height preference' in their search for love. This isn't a hard filter, Tinder says, as it won't actually block or exclude profiles but instead inform recommendations. One more thing Image Credits:Carma 10 years in the making: Carma Technology, which was formed in 2007 by SOSV Ventures founder Sean O'Sullivan, filed a lawsuit earlier this year against Uber, alleging the company infringed on five of its patents. The lawsuit is fairly new, but the allegations go back almost a decade.
Asharq Al-Awsat
3 days ago
- Business
- Asharq Al-Awsat
Judge in Google case questions future of search amid rise of AI
A judge asked the US Department of Justice on Friday how much room there would be for new search engines to emerge given the rise of artificial intelligence, as antitrust enforcers press for Alphabet's Google to take dramatic measures to restore competition in online search. US District Judge Amit Mehta is overseeing the trial over proposals to remedy Google's search monopoly. If he approves the DOJ proposals, artificial intelligence companies could get a boost after already rattling Google's status as the go-to tool to find information online. Mehta asked DOJ attorney David Dahlquist during closing arguments in Washington whether AI should be considered a way to access search, or as a kind of competing technology, Reuters reported. "Do you think someone is going to come off the sidelines and build a new general search engine in light of what we are seeing?" Mehta asked. Dahlquist replied that search isn't going away, and that the DOJ's proposed remedies are designed to keep Google from blocking AI-based competitors. A witness from OpenAI testified in the case that the ChatGPT creator is years away from its goal of being able to use its own search technology to answer 80% of queries. The DOJ and a coalition of states are pressing to make Google sell its Chrome browser, share search data and cease multibillion-dollar payments to Apple and other smartphone makers and wireless carriers that set Google as the default search engine on new devices. Dahlquist said that the remedies are designed to pry open markets for online search engines and related advertising as well as restore competition that Google's conduct has "fundamentally broken." The trial on the proposals began in April. Mehta has said he aims to rule on the proposals by August. If the judge does require Google to sell off Chrome, OpenAI would be interested in buying it, Nick Turley, OpenAI's product head for ChatGPT, said at the trial. OpenAI would also benefit from access to Google's search data, which would help it make responses to user inquiries more accurate and up to date, Turley said. Google says the proposals go far beyond what is legally justified by the court's ruling, and would give away its technology to competitors. The company has already begun loosening agreements with smartphone makers including Samsung Electronics to allow them to load rival search and AI products. The DOJ wants the judge to go farther, banning Google from making lucrative payments in exchange for installation of its search app.
New York Times
3 days ago
- Business
- New York Times
The Judge's Data Dilemma in the Google Search Case
Data played a starring role in the government's successful antitrust suit against Google accusing it of illegally protecting its monopoly in online search. Now, steps to force Google to unlock its data trove could figure prominently in a ruling on how to address the tech giant's dominance, antitrust experts say. On Friday, the federal judge overseeing the case, Amit P. Mehta, will hear closing arguments in federal court in Washington on what corrective measures, known as remedies, he should order to restore competition. The government's requests include forcing Google to share its search engine results and advertising data with rivals. Justice Department lawyers have repeatedly described data as 'the oxygen' for search engines. And in his ruling against Google in August, Judge Mehta recounted in detail how the company harvests vast amounts of data from user searches and web crawling, then stores and analyzes the data to rule the lucrative market for internet search. Google, he noted, collects nine times as much user search data every day as all its rivals combined. And as more data is fed into Google's software, the results that the search engine returns on everything from biology to bluejeans become more accurate and relevant to the person seeking information. Better search performance, in turn, attracts more users and more advertisers, Judge Mehta wrote. It's a flywheel that steadily enhances Google's search and acts as a barrier to competition. 'At every stage in the search process,' the judge wrote, 'user data is a critical input that directly improves quality.' Want all of The Times? Subscribe.
