Google Zero comes for Google as the tech giant’s own AI platform tanks its stock price

I took some grim satisfaction in Google’s very bad Thursday, a consequence of the same forces that the company is using to deprive news organizations of click-throughs to their websites. (And no, I will not refer to the company as Alphabet, although it is in the soup.)

Google’s stock price declined by nearly 13%, costing it $500 billion in market value. A major part of the reason is that those AI summaries Google is posting at the top of search queries are doing exactly the same to the tech giant as they are to media companies: keeping users on site rather than clicking through to a page that would serve up some ads.

Sara Fischer reported at Axios in March that “referral traffic from traditional search engines has declined by 60% for small publishers, compared with 47% for medium-sized publishers and 22% for large publishers, per Chartbeat.” In other words, the Google Zero phenomenon has hit local news outlets especially hard.

Now Google Zero has come … for Google. As Gizmodo put it in a headline, “Google Eats Its Own Tail (and Profits) With AI Summaries as Stock Price Plunges.” AJ Dellinger writes:

Philipp Schindler, chief business officer at Google, said that the AI-generated responses that Google now overwhelmingly serves to users whenever they search for anything have made it more difficult for Google to monetize results, cutting into its usually extremely profitable advertising business and contributing to the company missing its revenue projections in its latest earnings call.

And it’s not like Google can walk away from AI search. If it does, users will simply gravitate to another AI platform. My main search engine these days is Claude, although I hasten to add that I always ask for links to credible information.

Meanwhile, Reddit has announced that it’s moving away from the open web and instead preparing to require that users log in. The goal, writes Matt Growcoot of PetaPixel, is to make it harder for AI bots to scrape the site:

One of the main reasons behind the decision is the growing volume of automated activity targeting Reddit’s content. The platform contains a substantial collection of discussions and user-generated material, making it a valuable source of information for AI companies. Automated tools can access the website and collect large quantities of posts, often without the company’s permission.

As we wait for the AI bubble to burst, it’s fascinating to see how Big Tech’s best-laid plans are starting to run afoul of reality.