Google (GOOG, GOOGL) is experiencing increased competition in the search industry from emerging AI-based platforms. During an antitrust hearing, Apple's (AAPL) Senior Vice President of Services, Eddy Cue, testified that web searches via Apple's Safari browser have declined for the first time. Google pays Apple about $20 billion annually to maintain its search engine as the default on Safari. A decline in Safari searches may indicate reduced Google search traffic. However, Google reports that its search traffic on Apple devices continues to grow.
Cue attributes the decline to users opting for AI-driven services like OpenAI's ChatGPT and Perplexity. He hinted that Apple might integrate these platforms into Safari's search options. This development occurs amid the U.S. Department of Justice's (DOJ) antitrust actions against Google, which may force the company to sell parts of its search business and terminate exclusive agreements like the one with Apple.
Analysts believe Apple aims to preserve its lucrative revenue-sharing deal with Google. While Google has responded to AI competition by launching its chatbot, Bard, and later Gemini, its search traffic on iOS is reportedly still growing, suggesting users are shifting from browsers to apps for search.
