Google's business model may face a major change! Reports suggest considering charging for AI-based search

After the U.S. stock market closed on Wednesday, according to media reports, Google is considering charging for a new "advanced" search feature based on artificial intelligence, which would be a major change for its business model, marking the first time Google's core product is set as a paid service.

Sources revealed that Google is considering various options, including adding certain AI-based search features to its premium subscription service, which currently allows users to access its newly launched AI assistant Gemini for Gmail and documents. This year, Google added a new premium tier to its Google One consumer subscription service for users who want to use its advanced Gemini chatbot.

Engineers are developing the technology needed to deploy the related services, but Google's top leadership has not made a final decision on whether to release them or the timing of the release. It is currently unclear how Google will integrate AI search features into these paid services that offer different price levels, and it is also unknown when the AI search features can be launched.

Google's traditional search engine functionality will continue to be provided for free. According to sources, Google may still, over time, incorporate the functionality of certain experimental AI search services into its main free search engine.

It should be noted that even for subscription users, ads will continue to be displayed alongside search results.

For many years, Google has provided services to users completely free of charge, funded by advertising revenue. Last year, Google's revenue from search and related advertising business was $175 billion, accounting for more than half of its total revenue. However, the latest developments in AI pose a major challenge for Google, namely how to embrace the latest AI innovations while protecting its biggest source of profit.

Google faces challenges from all sides:

• In November 2022, OpenAI launched ChatGPT, and Google has since been working to address the competitive threat posed by this widely popular chatbot. ChatGPT can quickly and comprehensively answer many questions, potentially making traditional search engine result lists and accompanying ads redundant.
• In May last year, Google began testing an experimental AI search service that could provide more detailed query answers while continuing to present users with more information and links to ads. Google only provided access to the experimental AI search service to a few users, including some subscribers to the Google One plan, which offers additional cloud storage space and other services for a monthly fee. However, Google has been slow to add the functionality of its experimental AI search service to the main search engine. The reason is that the cost of such search results is higher than Google's traditional search results, as generative AI requires more computing resources.
• Microsoft, as an investor and important partner of OpenAI, launched improved GPT search and chatbots in the Bing search engine over a year ago, which is now known as Copilot However, these new artificial intelligence features have not had a significant impact on Bing's market share as expected, with Bing's market share far behind Google's.
• Some analysts warn that if Google's search engine provides more complete AI-generated answers and no longer requires users to click on advertisers' websites, Google's advertising business may be significantly affected.
• In addition, many online publishers who rely on Google for web traffic are concerned that if Google's AI search extracts information from their web pages and presents it directly to users, the number of users visiting their websites will decrease.

Analysts suggest that Google's significant reforms to its core search business indicate that, more than a year and a half after the release of OpenAI's chatbot ChatGPT, Google is still working to address the technological threats to its core advertising business.

Alphabet, Google's parent company, rose 1% in after-hours trading on the US stock market, but later gave up its gains and turned into a decline.