According to Reuters, shares of Alphabet fell much as 4% on Monday, following the report of Samsung considering changing the default search engine to Microsoft’s Bing on Galaxy devices.
This led to a mass effect on Google and its web search empire, which added $162 billion last year in annual income. However, Google search is now receiving serious challenges with the surge of AI.
$50 billion loss:
Alphabet’s (NASDAQ: GOOGL) stock fell to $104.90 and wiped away $50 billion from its market capitalization, it is seen as a major loss for Google after the report on Samsung surfaced. Also, it’s one of the biggest decline for the company.
Meanwhile, Microsoft enjoyed a sharp rise of 1% in the stock. This says a lot about the entire scenario.
Google controls over 80% of internet searches. To maintain its top position in the internet search industry, it pays billions of dollars to phone makers. Apple tops this list with a yearly contract of $20 billion to feature Google as a default search in iPhones.
Samsung comes second with over $3 billion. However, it’s not confirmed whether Microsoft is planning to give the Korean company more to ditch Google.
After paying phone makers, Google makes its share of money from advertising on search results. For those who don’t know, Microsoft has integrated OpenAI’s ChatGPT into Bing. This is allowing users to interact with Microsoft’s search engine similar to ChatGPT.
Although, Bing is not as big as Google but the latest report has already caused big mayhem for the search giant. Related to this, Google said it’s also working on new AI-powered features for its search but refrained from commenting on Samsung.
But it’s worth mentioning that Google employees are in shock after checking this news. And it’s quite obvious as Samsung is the largest Android partner and beneficiary at the moment. The phone maker sells millions of phones in a year and currently serves as the Android champion in the smartphone world.
It’s possible that Samsung may change its plan and remain with Google. However, the loss of $50 billion might help the search company to look for more options and refrain from such decline in the future.