The impact of AI in advertising, the market value of Google decreased by 500 billion dollars

Google's artificial intelligence (AI) has led to a decline in revenue from advertising on the company's search engine. This is due to the AI ​​summarizing the subject when searching for something in Google's search engine. Google's parent company Alphabet's market value fell by more than $500 billion on Thursday after news of declining advertising revenue emerged.

Philip Schindler, Alphabet's chief business officer, said that Google's 'AI mode' gives direct answers to users' questions in the search engine like a conversation. As a result, the revenue from ads displayed next to the conventional results that appear in Google search in response to user queries has decreased. However, Schindler is optimistic about this new search system.

Google's role in helping users find answers to questions around the world is being challenged by rapid advances in AI. Millions of people are now using AI like ChatGPT and Cloud instead of Google search engine. By using AI-based chatbots like ChatGPT and Cloud, various queries can be answered in detail.

Kim Scott, the former head of Google's advertising department, said that Google is willing to damage its search business with its own AI technology, but does not want to let another company take over its business. He said, one of the foundations of establishing Google was to invest in the technology sector for the long term. They don't mind if it causes short-term damage.

Alphabet released its financial report on Wednesday. It is said that the company's total income increased by 25 percent to 12,760 million dollars in the three months up to September this year compared to the previous year. However, the company could not earn according to the expectations of analysts. In particular, lower than expected advertising revenue has raised concerns among investors.

Alphabet's share price fell more than 12 percent to its lowest level in six months after the financial report was released. At the end of Thursday, Alphabet's total market value in the stock market fell to 346,000 million dollars. Tracy Wu, principal analyst at research firm Forrester, said the disappointing results for Alphabet's search business showed how difficult it is for established businesses to maintain a strong foothold while funding huge investments in AI.