Breadcrumb Trail Links
PMN Business
On today’s Big Take podcast: Google’s risky gambit to revamp its lucrative namesake search engine after the debut of ChatGPT.
Author of the article:
Published Mar 24, 2025 • 11 minute read
Article content
(Bloomberg) — Never miss an episode. Follow The Big Take daily podcast today.
Article content
Article content
Search is the most lucrative part of Google’s business. So when ChatGPT launched in 2022 and offered to answer users’ every question, it posed an existential threat to the company, forcing Google to respond. Google had to figure out how to compete. But integrating generative AI into Google search would fundamentally change the company’s core product, and it introduced big risks.
Advertisement 2
Article content
Bloomberg reporters Davey Alba and Julia Love spoke to Google executives and former employees to get a look inside Google’s plans to transform search with AI.
Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts.
Terminal clients: click here to subscribe.
Here is a lightly edited transcript of the conversation:
David Gura: It’s 2021, and some employees on Google’s web search team go to their leadership with an idea:
Julia Love: Having a chat bot that could answer some of users questions directly alongside the links.
Gura: Julia Love is a tech reporter at Bloomberg, who covers Google. And so is Davey Alba:
Davey Alba: This was several months before the launch of the massively popular ChatGPT in late 2022.
So Google search was raking in billions of dollars for Alphabet, the parent company, and engineers and leadership just didn’t want to mess with that money-making machine.
Gura: So when this group of employees present this proposal, to use artificial intelligence to answer some of users’ search queries directly… leadership shoots them down.
Advertisement 3
Article content
Love: It was so taboo at that time to think about disrupting the way Google search worked.
Alba: Generative AI just hadn’t had its moment yet.
Gura: The next year, OpenAI rolled out ChatGPT, and all of a sudden, Google faced a reckoning: It can no longer just embrace the status quo. It has to adapt.
Well, three years later, Julia and Davey set out to assess how Google’s belated attempt to infuse their core product with generative AI is going:
Love: We spoke with a lot of former employees who had worked on the product and moved on. Google also granted us considerable access and then we also fanned out and talked to the publishers and creators who really live and die by Google’s business practices.
Alba: We had had this creeping sense over the past few months and maybe even a year plus at this point that Google search had been changing. There’s been a lot of ink spilled over this idea that it has been changing for the worse that Google search is getting quite bad in quality.
Gura: The story that emerged is a window into how incorporating generative AI into Google search has become an existential issue, both for Alphabet employees and for the websites the company’s business is based on.
Top Stories
Article content
Advertisement 4
Article content
I’m David Gura, and this is the Big Take from Bloomberg News.
Today on the show: inside the changing world of Google search, with reporters who’ve gotten a firsthand look at the way that plain white search page has been reworked, and from a web creator whose livelihood is threatened by it.
Just think about what it would’ve been like to be one of those team leaders at Google, back in 2021. Maybe you’ll sympathize with how little interest there’d be in mucking up Google’s clean, reliable search interface with new AI elements.
After all, search made Google nearly $200 billion in 2024. That’s around 60% of Alphabet’s total revenue. And it keeps a lot of people employed.
Love: There are thousands of people who keep Google search humming smoothly. The code base is massive, and it’s kind of a creaky machine in some ways. It’s been around since the late nineties, and there are some relics of that time, code written by Marissa Mayer, who went on to become the CEO of Yahoo. And I think that there’s so much attention devoted to keeping those results delivered quickly.
Gura: That instant response Google spits out when you enter a search query… it’s central to the product’s appeal. Which made it a challenge to add any kind of feature to search.
Advertisement 5
Article content
Love: They know they risked losing users, with any small increase in the time it takes the page to load.
Gura: But users had started to complain that Google search was getting worse. It was being cluttered with bot-created junk sites, built to maximize clicks. That degraded the quality of Google’s search results. And it alienated users.
Alba: The example I always go to is when you land on a recipe site, and there’s this long prelude ahead of the actual recipe and the steps and the ingredients and the food bloggers life story. So that’s one, quite illustrative example of what, you know, web creators were starting to do, which was create websites that were written for Google search and sort of catered to Google’s algorithms. And that started to change the way the internet looked and made it also in some ways a difficult problem for Google to rank high quality websites high up in its results.
Gura: Google employees were aware of this problem. And then… Open-AI launched ChatGPT:
Gura: How did that reverberate around Google, Alphabet more, more broadly. How did they react to the debut of that, that platform?
Advertisement 6
Article content
Alba: They reacted with a lot of panic. They declared a code red, which means all hands on deck. And within the search org, they transferred something like 1000 engineers, which is a sizable proportion of the engineers that work within that division, and set them loose on this project of coming up with an answer to ChatGPT. So how do you make search more integrated with generative AI technology?
Love: It was just this very, you know, all hands on deck situation.
Gura: It’s not as if Google hadn’t worked with AI before. They’d been using the technology under the hood to make results better for years. But incorporating generative AI right into its flagship products, including search? Overnight, Google went from feeling cautious about it… to doubling down.
Love: I think that the response that we saw was in some ways akin to, response to social media. Everyone at Google had to have a social component to their products. That was a mandate. Bonuses were tied to that. And, we heard that, after ChatGPT, every product had to have a generative AI feature but it, I think the stakes were higher. It just felt much more existential than even social media did because, if AI can answer users’ questions directly, then who needs the list of links? Who needs Google?
Advertisement 7
Article content
Gura: This sudden pivot wasn’t easy.
Google had built its product as an information aggregator, directing users to other sites who themselves provided information. Providing information directly came with new risks.
Love: One former employee told us that Google is kind of weighed down by this notion of Google speaks the truth. That’s how the public often sees it. And so when ChatGPT launched, it was a fun novelty. It was something new, but if it occasionally hallucinated, that was something people were kind of willing to accept as part of the compact with using cutting edge technology. And for Google search to be offering up that type of experience, I think that the public expectation is just very different and executives were very aware of that.
Gura: Fully aware of the stakes, Google charged forward. And a few months later, it started beta testing a new feature: AI overviews.
Alba: It was quite a move. It was really Google signaling that, they were no longer so paranoid and afraid about making mistakes, as generative AI is wont to do, and that they were willing to sort of play with search. And, I think the huge advantage that Google has had is that they already have these products and services that have been in use among the general population. And, you know, whether or not the public was necessarily asking for generative AI to be embedded in, in those tools, Google sort of made that decision for people and rolled these features out anyway.
Advertisement 8
Article content
Gura: In other words, Google’s response to ChatGPT has been to roll the dice on AI.
Next up, how that gamble has worked out for Google… and for the web creators who rely on those all-important search results… that’s after the break.
Liz Reid oversees Google’s push into the Wild West of AI.
Love: Liz Reid is a really interesting figure within the company. She’s been with the company since 2003 when she was fresh out of college. She spent most of her time in Maps.
She told us a story about Sergey Brin and how he was just, really urging the team like to launch as soon as possible. And Liz said that that was the right call, that it made sense to get user feedback, as early as possible, even if all the kinks hadn’t been ironed out. And I think that that’s a philosophy that we really saw her apply.
Gura: Former employees told Julia and Davey that the search team under Reid seems to have found a new lease on life.
Love: It does seem like there is renewed vigor and energy in the organization. It had been through kind of a long period of slumber, but now people I think are really motivated. They have a target to catch up to and they have been rolling out products much faster.
Advertisement 9
Article content
Sundar Pichai has boasted in the earnings calls about how they have really succeeded in driving down the cost of serving up these AI answers, which is always a strength of Google’s, scale and efficiency.
Gura: But that growth in the AI accompaniment to search has come with some notable hiccups.
It’s generated a lot of errors, and continues to do so to this day. That’s a big issue for users.
But perhaps the biggest issue has to do with important collaborators: the websites that it partners with. Websites like HouseFresh, which Gisele Navarro runs…
Gisele Navarro: What we have been told by Google is that the search results have changed and that whatever we were receiving in traffic, 5,000, 7,000 people coming to the site every day from Google, that’s not going to come back because the search results have changed.
Gura: HouseFresh publishes detailed reviews of air purifiers. The site depends on the revenue it gets when users buy the products it’s reviewed—and it relies on Google to get users on its page in the first place.
Gisele and her colleagues complained on social media and wrote articles about the way the AI search component was affecting their business. It caught Google’s attention, and she was invited to attend a “Web Creator Conversation Event” at Google’s Mountain View headquarters last fall.
Advertisement 10
Article content
Navarro: At the beginning we were all very angry and the morning sessions were very upsetting because I think we were just hearing again and again, it’s not you, it’s me kind of thing.
It’s not you, like your websites are great. Keep doing what you’re doing. And we’re like, you know that what we do costs money. We can’t just keep doing it in the hopes that you’re going to get it right.
Gura: Navarro says, it felt like Google’s engineers had been told to respond to any ideas the web creators offered by shooting them down.
Navarro: As the day progressed, I think lots of the creators in the room checked out as this is just a, this is just a PR exercise.
Gura: Julia and Davey spoke with many web creators in their reporting, and they found that Navarro’s experience isn’t unique.
Alba: And most of these websites simply haven’t recovered. Some of the site owners that we spoke to have gone out of business and stopped publishing and, you know, sort of the only thing that has changed on Google’s side of the equation is, their increased focus on AI and generative AI. They really feel like the unspoken compact between them and Google has failed, in a lot of ways, and that they can’t rely on Google to be a reliable source of traffic anymore.
Advertisement 11
Article content
Gura: Apps like ChatGPT haven’t had a meaningful impact on Google’s market share yet.
Love: But analysts tell us they are beginning to see some signs that ChatGPT and other products are starting to have an effect.
Gura: Analysts are forecasting Google’s search revenue growth will slow down. After all, for a company that was built on web search, and for whom search remains the most lucrative part of its business, the changes wrought by AI are raising all sorts of existential questions.
Alba: We asked the question of executives, what does it mean to Google anymore? When you say, ‘oh, just Google that’ or ‘let me Google that for you.’ Everyone knows what that means. But in this sort of age of generative AI, I think Google is thinking about that verb in a different way even.
Gura: In other words, Google may have signed up to explore the AI universe … but it hasn’t yet figured out what its role is in the expedition.
Alba: One thing that is undeniable that’s come out of our reporting is that Google for better or worse shapes the open web as we know it, and it also reflects the open web. And so we are kind of in this cycle where creators of the web are disincentivized to create, you know, sort of human written content to put out on the Internet that Google would then point traffic to.
They’re really contending with like a flood of AI slop that is invading the open web and you know, Google’s AI also trains on material that is out there, including this AI-generated content. And so I think we’re kind of in this cycle right now, where the web is slowly degrading.
Gura: Google was one of the pioneers in making the web an integrated part of modern human existence. Its challenge now appears to be how to embrace this new phase of intelligence, without deleting the humanity that made it possible in the first place.
Article content
Share this article in your social network
