analysis
Google has been around for 25 years. Billions of people use the search engine today – and pay with their data. The parent company Alphabet is one of the most powerful companies in the world. Where is it developing?
Almost everyone searches the web with: Google. The search engine has a global market share of around 90 percent. The competition is far away. First of all, the Google services do not cost any money; those who use it pay with data.
The search engine has turned parent company Alphabet into one of the most powerful and valuable companies in the world. Exactly 25 years ago today, Larry Page and Sergey Brin founded Google. The world headquarters at the time was in a garage in California.
Almost $60 billion profit
Google also sells cell phones – with its own Android operating system – and operates the video platform YouTube. The Alphabet Group is also developing robotic taxis and drones for a delivery service and wants to develop methods against human aging. Last year alone, Alphabet made almost $60 billion in profits – mostly from selling ads on Google’s search engine and YouTube.
In order to stay powerful, the group invests: According to media reports, for example, it should pay billions of dollars a year to Apple or Samsung so that Google remains the default search engine on their cell phones, tablets or laptops.
Google also repeatedly pays high fines – more than four billion euros to the European Union a year ago alone. The accusation was that the group had made illegal specifications for manufacturers of Android cell phones; also with the aim of consolidating the power of the Google search engine.
Artificial intelligence is transforming business
However, the way users search the web is changing significantly, mainly due to artificial intelligence (AI). So far, it’s always been like this: You type in a search term and you get the right links as a result. Thanks to so-called generative AI, a result can now also be a concrete text.
In the future you can also chat with search engines and no longer just type in terms. “The search will be more of a question and answer, more of a dialogue,” says Google Germany boss Philipp Justus ARD-Interview. “I will be able to be in conversation with the search engine, which also understands me better. And understands the context better.”
The question is how much that could affect Google’s advertising business. At Microsoft, this chat feature has been available to everyone for months; Google is also upgrading its search engine accordingly. But not everyone can access it yet. Nevertheless, nothing seems to have changed in terms of market share so far.
Stricter rules in the EU
Google is also challenged by stricter government regulations. “Digital Services Act” and “Digital Markets Act”: These are the new digital laws of the EU. Of course, they also affect the Google search engine and platforms such as YouTube, Google Maps or the “Play” app store.
There are more rules about who and how advertising can be played out. Archives must also be created in which all the advertising content played out is made available. The more requirements Google has to meet, the more difficult it becomes to target users with advertising – and that’s how Google makes most of its money. Platforms that don’t follow the rules face fines running into the billions. The question remains, however, how strictly the new rules will be enforced.
“Generation Z” is looking elsewhere
Basically, the “Digital Services Act” is about more transparency for users. “Before the Act, many decisions were made in closed boardrooms, but they have profoundly shaped our society and democracy,” said EU Competition Commissioner Margrethe Vestager. “Things are more in flux now. We need a stronger democracy.”
But who are the users? Younger people no longer necessarily google on Google. Anyone who belongs to “Generation Z” and searches the Internet does not necessarily use Google – but the video app Tiktok.