A question of breaking the monopoly

Ian Ritchie / The Herald Business HQ / June 2025

THE ARRIVAL of the internet in the mid-1990s completely revolutionised the world of information communication, largely due to the innovative search engine invented by two researchers at Stanford University, which made it easy to find any information on the internet; and then capture most of the world’s advertising spend.

But is the business model of the Google search engine numbered?

Many people now obtain most of their information online, via Facebook, X, or TikTok and not through journalism sources such as newspapers, magazines, or even TV. Since 2005, over 2,500 US newspapers have ceased publishing and thousands of journalists have lost their jobs.

Those that remain have circulations which have plummeted along with their advertising revenue. Advertising has largely moved online and the main beneficiary of this has been Google, the company founded by those two Stanford researchers.

Google was launched in 1998 to bring to market their revolutionary technology, based on the measurement of how many other websites link to a specific site – the more that do the more relevant the site is assumed to be. Paid advertising is then also attached to the search, and that money ends up with Google in California.

Today, Google’s parent is one of the world’s largest companies, worth over $2 trillion; it also owns DoubleClick which sells advertising space in online publications, and YouTube, the leading video streaming site with paid-for adverts.

Dominic Ponsford of UK Press Gazette reported last month that Google leads in online advertising revenue. He estimates that it amounts to around £26bn, or 60% of all UK advertising. Traditional publishers of newspapers and magazines now share only 3.8 per cent of the advertising market, down from 39 per cent in 2007.

These days, companies who need to find new customers for their product or service bid in an auction to be listed high up in a search, in a technique known as ‘search engine optimisation’ (SEO). It is now the major method to become noticed.

Google is overwhelmingly the major provider of online search. It is estimated that they have almost 90 per cent of the global market.

This situation has inevitably led to intervention from competition regulators. A couple of recent judge-led cases in the USA has suggested that Google behaved illegally in allegedly favouring their own results rather than the most popular ones, or running auctions where they secretly manipulate the results, or hide excessive charges in the range of 20-40 per cent for advertising placement. Google rejects these charges.

With nearly 90 per cent of the market for search it remains overwhelmingly Google’s largest source of income.

But can it last?

There are signs that the days of traditional search technology may be numbered.

The arrival of AI has introduced new ways of finding information that is more precise and frequently delivers much more useful results.

This gives various competitors a chance of breaking into Google’s near monopoly. So far, Google has been the most effective search engine, but if AI can provide a better result, it might well open the market to competition.

Microsoft’s has introduced a Copilot Search feature which adds a summary to the top of a search and has also introduced a new search interface called AI Mode which you can ask questions like a chatbot.

As one of the few companies with the resources to challenge Google, after years of nursing their Bing search engine they may be ready to take them on.

There are now new AI powered alternative search products, such as Andi Search, Bagoodex, Perplexity and Visit Site at you.com which generally provide a richer response to a search.

Another big beast is OpenAI with ChatGPT which might be the most likely to give Google some real competition. Using ChatGPT provides a hugely more relevant answer than the often very frustrating Google search.

In response to this competition, Google, which owns Gemini is now appending an AI summary at the top of some searches, introducing a number of issues which may affect their own business model.

Companies who pay for placement may be less willing to appear if they find that users are less likely to scroll down to follow their links, but the real victims of this new environment may well be the world of publishing.

Currently, users may well interrogate links to various news sources, but if they find that the AI summary provides them with the information that they want they might well be satisfied with that.

Mail Online reports that having an AI summary attached at the top of a search causes a fall of up to two thirds of people clicking their links.

Clearly, search engines are fundamentally changing for the first time since they were invented. We may well see some real competition to attack what is effectively a Google monopoly.