Shares of Alphabet Inc. drop on news that Samsung may switch from Google Search to Bing. Shares of Alphabet Inc (GOOGL.O) fell by over 4% on Monday on news that Samsung Electronics (005930. KS) of South Korea was considering switching from Google to Bing, which is owned by Microsoft (MSFT.O).
The report, which was published by the New York Times over the weekend, highlights the increasing competition that Bing, a previously obscure player that has recently risen to prominence thanks to the incorporation of the artificial intelligence technology behind ChatGPT, poses to Google’s $162 billion yearly search engine business.
According to the article, Google’s internal texts reveal that the company’s response to the danger was “panic,” as Google’s annual earnings from the Samsung contract are estimated to be $3 billion.
According to the article, Apple (AAPL.O) has another $20 billion connected to a comparable contract up for renewal this year.
Reuters’ inquiries for a response from Alphabet and Samsung went unanswered for some time.
Google has had an 80% search market share for many years. Still, Wall Street worries that the business may lose ground to Microsoft in the increasingly competitive artificial intelligence (AI) market.
Alphabet’s parent business took a $100 billion hit on February 8 after a promotional film for its new chatbot, Bard, had factual errors and an associated company event failed to impress.
On Monday, the stock dropped to $104.9, wiping off over $50 billion in market value for Alphabet. Nevertheless, Microsoft’s 1% increase was better than the market average.
Investors are concerned that Google has become a lazy monopolist in search. According to Atlantic Equities analyst James Cordwell, events over the past several months have served as a wake-up call.
In addition, Cordwell noted that costs might be associated with making Google Search more competitive with AI-powered Bing.
The New York Times it was claimed that Google was working quickly to develop a new search engine backed by artificial intelligence that would provide a more tailored experience than the company’s existing offering, which is also slated to receive an AI-powered upgrade.