- Google parent company Alphabet is at risk of losing a multibillion-dollar search engine contract with Samsung to Microsoft’s Bing, potentially signaling the fading of Google’s search engine dominance.
- The loss of the Samsung contract, worth a reported $3 billion per year, could lead to a drop in Alphabet’s share prices, which fell by as much as 4.1% in early trading on Monday.
- Microsoft has been outperforming Alphabet’s stock in recent months, partly due to its early lead in the artificial intelligence space and its integration of OpenAI’s ChatGPT into Bing and Edge.
- Samsung accounts for roughly 20% of smartphone users worldwide, and a switch from Google to Bing as its default search engine would be a significant blow to Google’s market share.
Alphabet, the parent company of Google, may be in danger of losing a lucrative search engine contract to Microsoft, according to a recent New York Times report, leading to a drop in Alphabet’s share prices. The contract in question is worth a reported $3 billion annually and could be awarded to Microsoft’s Bing search engine, as Samsung is considering switching from Google to Bing as the default search engine on its devices.
Although the contract represents just over 1% of Alphabet’s annual revenue, it highlights the ongoing competition between the two technology giants, and could indicate a fading of Google’s search engine dominance. The report suggested that there was “panic” among Alphabet employees over the potential loss of the Samsung contract.
Alphabet’s shares dropped as much as 4.1% in early trading on Monday, resulting in a loss of $57 billion in market capitalization, while Microsoft’s shares climbed 1.6%. This follows a trend of Microsoft outperforming Alphabet’s stock, with Microsoft’s shares up 21% since the November launch of ChatGPT, OpenAI’s chatbot incorporated into Bing, while Alphabet’s shares are up just 10% during the same period.
Goldman Sachs analysts recently noted that Microsoft has an “early lead” in the artificial intelligence space and is exhibiting a “renewed vigor” in the search market. Microsoft’s integration of ChatGPT into Bing and its Edge web browser has been seen as a strong move, while Google’s Bard chatbot has received less enthusiastic feedback.
Microsoft has also made a significant investment in OpenAI, reportedly investing $10 billion into the company and taking a 49% stake in it. This investment has given Microsoft an advantage in the generative AI space, and some analysts believe that Microsoft has the potential to separate itself from its competitors.
Samsung is a significant player in the smartphone market, accounting for roughly 20% of smartphone users worldwide. If Samsung were to switch to Bing as its default search engine, it would be a significant blow to Google’s market share.
The potential loss of the Samsung contract to Microsoft highlights the ongoing rivalry between these tech giants and underscores the importance of staying ahead of the curve in the fast-changing technology landscape. The shift towards AI and machine learning technologies in search engines could give Microsoft an edge over Google, which has traditionally been dominant in this space. However, it remains to be seen whether Microsoft can maintain this lead in the long term and whether Google can mount a comeback. As the battle between these two tech giants continues, consumers and businesses alike will need to keep a close eye on the evolving search engine landscape to stay ahead of the curve.