Google is banking on AI agents, smart glasses to defend its search crown
Google (GOOG, GOOGL) took its first steps to move beyond its traditional Search product during its I/O conference on Tuesday, debuting a host of new technologies that won't necessarily supplant the 10 blue links that dominate the world of search, but pave the way for a future where they're far less necessary to our everyday lives.
From its ChatGPT-style AI Mode built directly into Search and agentic AI feature that will help you shop for products to its renewed push into smart glasses, Google provided early hints at how it's working to evolve its services at a time when the company is under threat from both AI upstarts and government antitrust enforcers.
Google built its advertising empire on the back of its Search platform, and it's still its most important business. But companies like OpenAI (OPAI.PVT) and Perplexity (PEAI.PVT) have developed their own competing generative AI search products.
Google's efforts to fend off its newest foes came into stark relief during one of its recent antitrust hearings when Apple's (AAPL) senior vice president of services Eddy Cue revealed that searches made via that company's Safari browser fell for the first time ever in April. Google is the default search engine for Safari, a part of a $20-billion-a-year deal between the two companies that the Department of Justice is seeking to break up via its antitrust case.
Cue attributed the decline to customers opting to use generative AI services like ChatGPT, but Google pushed back in a statement saying that it continues to see overall query growth in Search.
But the report sent shockwaves through Wall Street, with shares falling as much as 7.5% when the news broke on May 7.
Google has been on its back foot since OpenAI and its partner Microsoft (MSFT) raised the specter of a potential threat to Google's search crown in late 2022. And now the company is pulling out its big guns to prove to its customers and Wall Street that it should remain the search king.
One of the biggest changes Google is making to its Search platform is the addition of what it calls AI Mode. Previously only available via the company's Labs testing program, AI Mode allows users to have a back-and-forth conversation with Google's AI, similar to the kind of interactions you'd have with ChatGPT, Bing, or Perplexity.
Available first to users in the US, AI Mode is Google's way of competing in the chatbot space without having to ditch its traditional search product. Rather than replacing Search, AI Mode is available as a tab in Search, similar to items like Images, News, and Videos.
AI Mode uses Google's frontier models and takes advantage of what the company calls its "query fan-out" technique. The method, Google says, breaks down your queries into smaller subtopics, running a number of separate searches at the same time. That, Google explains, allows AI Mode to perform deeper searches than traditional Search.
Google Search's AI Overviews are also getting an update, with some search results pulling information from AI Mode's latest AI models, providing a kind of bridge between the two search options.
Google says it's also bringing agentic AI functionality to AI Mode, allowing the software to do things like keep tabs on products you're shopping for and run through the entire checkout flow without you having to lift a finger until it's time to make the purchase.
AI Mode also adds a new try-on feature that lets you upload an image of yourself and see what clothes look like on you. It's clear based on those announcements alone that Google is putting a heavy emphasis on AI Mode, setting it up as a potential successor to the traditional Search product.
But the company isn't just focusing on improving its odds against newer AI firms; it's also working to combat the emerging threat of smart glasses. Google's biggest advertising rival, Meta, already offers its Ray-Ban Meta smart glasses in hopes that the eyewear will ring in a consumer tech revolution.
Meta is already building its Meta AI to perform search functions for users, and if smart glasses continue to improve and drive users to abandon their smartphones, or at least use them less in favor of searching on their eyewear, Google could find itself in serious trouble.
To that end, the company announced it's working with Samsung, Qualcomm (QCOM), Warby Parker (WRBY), and Gentle Monster to develop attractive smart glasses of their own.
There's no guarantee that smart glasses will become the go-to tech for consumers around the world like smartphones have throughout the years. But with the threats mounting to its Search business, Google can't afford to let the opportunity slip away.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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