In news that would seriously disrupt the online search market, it has emerged that Samsung is considering ditching Google as the default search engine on its devices and replacing it with Microsoft’s AI-powered Bing.
The touted move reportedly has Google in a “panic.” Google pays billions of dollars per year to have its search engine as the default option on devices. Its deal with Samsung is worth around US$3 billion (almost AU$4.5 billion) to Google every year.
“Wow, OK, that’s wild,” one Google employee reportedly responded to the news of Samsung’s potential swap.
Google also has a similar contract with Apple worth US$20 billion (almost AU$30 billion) which is up for renewal this year.
The search giant is working quickly to get its AI-powered Bard search engine ready for market but, after it bungled the product launch, it seems as though it may be some way off.
Following the revelations about Samsung’s proposed search engine swap, shares in Alphabet, Google’s parent company fell more than 3.5 per cent. Shares in Microsoft, meanwhile, were up about one per cent.
Despite using Google’s Android operating system on its phones, tablets, and other devices, Samsung has an established relationship with Microsoft, offering Office apps such as Word and PowerPoint, pre-loaded on Samsung phones.
But it is clear whether Microsoft would be willing to match the billions paid to Samsung to secure its use of Bing as the default search option on its devices. Microsoft does not rely on advertising revenue in the same way that Google does.
However, given that the US Department of Justice has been trying to disrupt Google’s more than 90 per cent market share of the search market for some time now, it seems as though Microsoft might have made its job a lot easier.
For digital marketing agencies, greater competition in the search market will likely lead to increasingly complex workflows and spending plans. However, it would also likely bring down the cost of individual CPMs.
