Big Technology Podcast
00:08:02 · Ranjan Roy, Alex Kantrowitz
[00:08:02] S1: I'm sure they are in [00:08:02] S0: AI mode as part of their search data, right, if it's grown from 2% to 8%, then AI mode counts as searches. [00:08:08] S1: Actually, you know what? So they actually said that overall search queries grew at their fastest year on year in five years. So they don't give aggregate total numbers. They don't break down what exactly qualifies as a search. I think that's a good point because to me, the idea that more people are searching more directly into the Google search bar, I agree. Like my... I mean, I know my personal behavior is probably not fully reflective of the average consumer, but overall, it has to be going down. So I think that's a good one to push on overall. What is a search? [00:08:47] S0: Because you know what? What do you do when you search? You want to go to a website. And what are websites experiencing? You know? They're not experiencing [00:08:55] S1: Well, no.
00:08:55 · Ranjan Roy, Alex Kantrowitz
[00:08:55] S1: Well, no. [00:08:56] S0: The traffic from Google Search. Let me just read this. I want to put this out for sake of argument. This is from the Reddit CEO Steve Huffman on his earnings call this week. He said Google is crawling as hard as ever. The reality is that the AI mode does not drive traffic, not for us, not to anybody as far as I know. Google used to be a traffic driver, now it's not. People want to... People still want Reddit. It's just Google is not sending them to Reddit the way they used to. We don't control Google. We only control Reddit. And then, my favorite part of the whole thing, and I think this is most telling Google is teaching people that if you want to come to Reddit, you need to come to Reddit. Is it possible that right now we're seeing a behavior shift where people used to search Google to find Google was an improvement on the portal, right? So you had Yahoo where you would click through a bunch of links to get to the website you want. Then you went to Google, you search for things wanted. What's happening now with AI that if you actually want to go to a website, don't search anymore. You just type in a URL. And so it's interesting. Google potentially by not sending referral traffic to sites like Reddit sort of has potentially even disintermediated itself. [00:10:07] S1: Yeah. No. I think this will happen across the board. I think it was a year ago. When did we say the web isn't dead? It is in secular decline.
00:10:07 · Ranjan Roy, Alex Kantrowitz
[00:10:07] S1: Yeah. No. I think this will happen across the board. I think it was a year ago. When did we say the web isn't dead? It is in secular decline. [00:10:17] S0: That's Every time... By the way, every time someone says last year, for me, it always means April because people can't, like, comprehend the fact that we've gone so far. Technology has developed so far from where we were in January to where we are now. They always say last year, and last year always means March or April. So I think we probably said it in March or [00:10:35] S1: Wait, wait. You're like a six month year guy? I'm You're not saying six months? [00:10:41] S0: I... I'm... Yeah. I'm saying, yeah. We're basically living in a world right now where every six months has a year's worth of activity. You don't think so?
00:10:41 · Alex Kantrowitz, Ranjan Roy
[00:10:41] S0: I... I'm... Yeah. I'm saying, yeah. We're basically living in a world right now where every six months has a year's worth of activity. You don't think so? [00:10:48] S1: I'm gonna... Okay. From a technology standpoint, I agree. I mean, I don't even remember last month or two months this summer that feels like ages ago, but but... Alright. Let's get back to... Especially Reddit. I think this was really interesting because why Steve Steve Huffman made a really good point that Google is pinging and crawling Reddit more than ever, yet sending less search traffic. It's declining dramatically. What is that saying? That Google is extracting information from every website out there, the Reddits of the world, but no longer that deal. Remember, the original deal why publishers, why everyone posting a website, let Google crawl their website was to hopefully that will drive traffic and it did and that was the entire foundation of like the economics of the web for decades. So I think that fund... This Reddit earning call is really interesting because they basically are recognizing finally that that is completely broken.
00:11:51 · Alex Kantrowitz
[00:11:51] S0: But it's it's more than that. Again, I'm trying to make the point here. And first of all, I should caveat. 12% growth when you have a business worth tens of billions of dollars, Google made 63.3% on search and other advertising in the third quarter. Sorry, 63,300,000,000. That's huge. And to grow from a 50 something billion base, 12% to $63,000,000,000 we shouldn't be sneezing at it just because they didn't do 15. But I do think, and that's the reason why people are wondering now, is there was a projection that they would hit 15, they hit 12. And why is that? They talk to us about how some of these AI overviews are going to cut into revenue. And searches are probably up, but I bet some of that conversation, the AI overviews counts. But more than this, it's possible to have a search business, users need a click out. And this is what I'm saying. It's not necessarily the bargain is gone, which it is. But the bigger issue is, is Google training people not to Google and just to go direct?
00:12:51 · Ranjan Roy
[00:12:51] S1: I I still don't think... I don't know. I... Again, as a heavy user of Reddit and still believer that it is one of the best places on the Internet to actually, like, find information and have human interaction, I am kinda happy because honestly, would rather... There was like this brief period where Reddit was driving so much AI related traffic that every business out there wanted to post on Reddit just to try to optimize for GEO. I'm kinda glad that that's... We're moving past that. But I still feel the behavior of going directly to website is gonna be a relatively limited thing. But as I say that, maybe again in the shopping world where I spend a lot of time, it could the more Google disintermediates the actual and it gives less control and value to the end business. They will push to not worry about Google. Already I can tell you, the idea that search traffic is the lifeblood of a business everyone has given up on. So like it's still kind of now one channel whereas before it was the lifeblood in a big way. So I agree but they have to. To Sundar's credit, innovator's dilemma and they're they're... They've chosen their strategy. So do you think it's the right one, though?