The other day, my friend, Paul, asked me if AI was going to harm Google? Is Google losing the AI war? Are they falling behind others in AI? Some folks he knows in San Fran think they see cracks in what had been Google’s impenetrable armor. My answers were — in order — no, no, and no. The answer to the bigger question nobody is asking is, “Yes.” That big question is, “Is Google becoming mortal?”

+++

For most of its thirty years, Google has been an unstoppable force. From its earliest days, we loved the simplicity of its screen. We relied on the power of its search. First it indexed our large, expansive digital world. Then, it literally mapped every inch of our larger, finite analog world. If we interact with it, if it has coordinates, temperature, time, text, ratings, prices, or any other “data,” Google can find it, organize it, and connect it to our interests. Oh, and put relevant ads around it.

What could possibly go wrong? Only one thing. What if we don’t need the Internet anymore?

Heresy. We will always need the Internet. It’s the thing that lets us, with Google’s help, tell some joker in a bar that Bill Mazeroski hit his most homers in a single season in 1958. Nineteen.

Now, go all the way back to 1988. Anna Wintour had just taken over as head of Vogue. She was an icon. The magazine was iconic. Anna knew the designers. She made them stars. A big audience bought every issue. Bought. Advertisers stuffed the pages with pretty pics and perfume scents to the spine-busting point. No magazine could displace it. What could possibly go wrong?

Things go wrong. Ask radio. TV. Cable. Newspapers. Magazines. Books. Are we really so in the moment that we can’t see anything can change? Sorry, make that, “Everything will change.”

The change affecting Google is not AI. No one in the history of anything has more data than Google. OpenAI isn’t going train an LLM with more data than Google already has for Bard. Or Gemini. Or, whatever they call it next week. Even if OpenAI gets close or pulls ahead, the difference won’t be material. Ask Bing. Perplexity? Puh-lease. Other VC-funded AI’s don’t stand a chance. Add that Google has been experimenting with AI long before it became the “it” topic of your LinkedIn feed.

So, what change has me wondering if Google is mortal? Display ads. Those ads you see when you’re on the Internet. Searching Google. Going to sites. Using apps not owned by Meta. Google places most of those ads, monitors almost all of them, and gets paid on nearly all of it.

In 1988, the slice of the digital ad pie chart wouldn’t have fed a mouse. By 1998 digital was still barely noticeable. In 2003, Google did $1.4B in revenue. Last year it had grown 167x to $237B.

Google didn’t just grow. Its growth has been so mind blowing it lacks context. So, let’s give it some. In September 2003, Nicole Kidman was on the cover of Vogue and the issue cost $3.95. Applying Google’s growth, today, it would cost $660 give or take a few cents. That’s the price of a Vizio 65” 4K Smart TV (soon to be owned by Walmart). Still not impressed? How about this? MSRP on a then-new, reasonably equipped 2003 Honda Civic was $15,000. That would be $2.5 million today if the price grew at Google’s rate. Unfathomable.

Display ads work better than print because they are much closer to intent. Google now knows I searched for Vizio TVs. If I didn’t use ad blockers everywhere, I would see ads for TVs from now until the Mazeroski hits twenty homers. Google tells people those ads will ensure I buy a TV. And Google would make sure they get the credit for pushing me over the finish line.

But there are places that are much better for intent these days than plain old Internet ads.

Since I don’t have $2.5M for a Honda Civic, I Uber. I just wrapped up at Wraps R Us and want to head to the Galleria Mall. I open my Uber app with an intent to be moved. The app tells me a car is two minutes away. It shows me an ad while I wait. Am I really going to Google something while I wait? No. I get in the car and fire up TikTok or Instagram or listen to Spotify. Do I need Google? No. Am I going to look for stories at CNN? No. The Internet gets me to Uber, but it’s not my focus.

Uber is an intent app. I go there with an intent to do something. Today, Uber knows where I am and where I’m going. Like Google, they’ve mapped my world. They know the Galleria is a mall and which stores are there. Over time, they’re going to know more about me and what I shop for. If you sell something that’s for sale at the Galleria, are you going to advertise it on Google? Not likely. On the open web? Puh-lease. TikTok or Instagram? Maybe. CNN? That’s a joke, right?

There are other intent apps. Amazon. Buying a blender? You might like [Blendo] the instant blender cleaner that paid to advertised near that blender. Instacart. Shopping for salad dressing? You might want to consider [Dress Right] salad dressing that paid to advertise to you because Instacart knows you like organic stuff. There are all sorts of intent apps. Walmart. Expedia. Travelocity. AirBnB. Every betting site. Every dating app. The places that serve us services.

Meanwhile, the value of display ads is falling. In most cases it’s below the cost that pays people to create content. That trend will continue. The business beauty of intent apps is that there is no content. Uber’s content is the map. Amazon’s is the shopping. Instacart is the groceries. Their ads are more valuable than display ads because they’re closer to our intents and their content is free. So they can undercut display ads prices. Even Google can’t compete with that combo.

Here’s where it gets interesting. Google is mortal. Its Achilles Heel is… wait for it… publishing. Even though Google doesn’t create content. Its ads run around content. Which means… forget AI, if Google doesn’t buy an intent app then…

Google’s only hope is to share some of its profits with publishers to keep the content going.

Mortality sucks.