"Samsung Considers Replacing Google with Bing, Alphabet Loses $55 Billion in Market Value"

Alphabet
Samsung
Bing
Search market
Competition
https://www.newsbreak.com/@c/1608581?s=01

In a surprising turn of events, a recent report from The New York Times suggests that Samsung is considering replacing Google with Microsoft's Bing as the default search engine in its phones. This move has the potential to put about $3 billion in revenue at risk for Alphabet, which has long held a near monopoly on the search market. As a result, Alphabet stock slid as much as 4% on Monday, erasing about $55 billion in market value.

This potential shift in the mobile search market is significant because Google has faced little competition in this space for decades. However, with the incorporation of OpenAI's ChatGPT into Bing search results earlier this year, Microsoft has become a serious contender. Alphabet is now working hard to defend its market share with a team of more than 160 people incorporating artificial intelligence features into its Google search product.

Despite Alphabet's efforts, it may not be enough to retain its market share if Samsung decides to set Bing as the default search engine across its hundreds of millions of devices shipped each year. While Google could still be made the primary search engine on Samsung devices if a deal between Samsung and Microsoft goes through, it would require users to change the phone settings on their own to make the change.

This report highlights just how much is at stake for Alphabet to defend its market share in search and regain its competitiveness in the generative AI search market, at which ChatGPT is thriving. In fact, an initial showcase of Google's answer to ChatGPT, dubbed Bard, was a flop.

The potential loss of $3 billion in annual revenue is not the only threat to Alphabet's dominance in the search market. A similar contract between Alphabet and Apple, which is worth about $20 billion in annual revenue to Alphabet, is due for renewal later this year. If Apple decides to move away from Google and toward a different search engine, it could significantly impact Alphabet's revenue and market share.

While negotiations between Samsung and Microsoft are still ongoing and could still end up with Google as its default provider, this report serves as a warning to Alphabet that it needs to continue innovating and improving its search product to remain competitive in the ever-evolving tech landscape.