Amidst intensifying competition in the artificial intelligence (AI) space, Alphabet Inc.'s GOOG GOOGL Google is already prepared to integrate ads in its AI-powered search.
What Happened: In its quarterly earnings call on Oct. 24, search and advertising giant Google has revealed it is ready to bring ads to Search Generative Experience, or SGE, which is an AI-powered version of Google Search.
"It's extremely important to us that in this new experience (SGE), advertisers still have the opportunity to reach potential customers along their search journeys," said Philipp Schindler, Google's chief business officer.
The explosion of AI in the mainstream this year, thanks to Microsoft Corp.-backed MSFT OpenAI's ChatGPT, has had most major companies scrambling.
This includes even Apple Inc. AAPL, which has otherwise innovated at its own pace.
With Microsoft now threatening to come for Google Search, one of the crown jewels of the Sundar Pichai-led company, Google has been rushing to infuse AI into many of its products.
Why It Matters: Advertisements are the bread and butter of Google, allowing the company to experiment in other categories without worrying too much about profitability. Google's ad business brought in $59.6 billion in revenue, accounting for 77.7% of the company's total revenue during the Sept. 2023 quarter.
With the future of Google Search being powered by AI, the company is trying to ensure its primary business of advertisements is ready to be integrated seamlessly into the new experience.
"We are making sure the product works well, and we're generating value for our ecosystem and that ads transition well," Google CEO Sundar Pichai said.
SGE is still available only on an opt-in basis, and a wider rollout is expected in the coming months.
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