Though only available in limited preview, the new AI-powered Bing search engine received a thumbs-up from 71% of testers, Microsoft said in a blog released Thursday. In addition, there has been increased engagement in traditional search results as well as with the new chat feature.
Needs improvement: “We are grounded in the reality that we need to learn from the real world while we maintain safety and trust,” Microsoft said.
Other requests included the ability to book flights, send emails, or share your search/query results.
What doess this mean for Google? Google did make a move into AI before Microsoft with Bard, its ChatGPT competitor, though it’s also working through some bugs in the product.
“[Google] has some of the deepest pockets in the industry, so it can and has invested. That tells me Bard will be every bit as cool and transformational as ChatGPT,” said our analyst Evelyn Mitchell on a recent episode of “Behind the Numbers: The Daily.” “The main difference between Google and OpenAI is that the bar for responsibility is higher,” Mitchell said. “If anything goes wrong with Bard, Google is already under a lot of regulatory scrutiny, so the stakes are higher.”
Google is also making these moves after a disappointing fourth quarter of 2022:
“[Google’s drop in search revenues] is pretty concerning,” said Mitchell. “When times are tough and advertisers are scrutinizing their budgets, search has historically been one of the last to see pullbacks, because it's easier to determine return on investment and justify continued spending. So when search suffers, it's an indicator that the ad downturn has gotten worse.”
Looking ahead: We predict Google will claim 53.9% of US search ad revenues in 2023. That’s down from 2021’s peak at 57.2%. Conversely, we predict Microsoft will pull in 5.2% of US search ad revenues this year. While Microsoft has a long way to go to close that gap, positive early reports from its AI-powered Bing launch could leave Google searching for new options to stop its search ad drop.
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