Google's focus makes them their own worst enemy in winning the AI war

Does it really have to be this way with search, when the biggest search provider has little but contempt for sources?

by Rob Corbidge

Published: 16:21, 20 February 2025

Alas, poor Reddit. Fattened up considerably by Google's search algorithm during much of the course of last year, a year in which it both went public and inked an AI content deal with the same Google, it has recently reported "weaker than expected" user numbers, seeing the share price fall.

Crucially, the number of logged out users coming to the site had not matched expectations, as search referral traffic had declined.

There's two stories here. Logged out Reddit users are infinitely less valuable to them than logged in ones, as is the case with publishers more broadly. Yet, with Reddit, it is those logged in users who provide the content that makes the site valuable. It's the "user generated content" that remains a chimera to many other types of publishers that is the reason for Reddit's existence.

As Google pushed Reddit to the top of search results, a new audience was exposed to the site. That audience largely hasn't engaged with Reddit in the way it requires for the organic growth that got it where it is today, by setting up an account. Now, it seems like the algo is also turning less in their favour.

The other story is Google. It feels like Mountain View plumped up poor little Reddit like a prize goose, told them they were the pick of the flock, pushed their profile and sang their praises, all with the ulterior intention of turning them into AI foie gras. The deal with Reddit was a way of getting a lot of human-curated content, fast, in order to feed the AI training machine.

Reddit's fate is of course incidental, as a mere content-producing city-state to the strategic battle over AI being fought by the Great Power Google against OpenAI and others. Success in this area, notably without knowing what the victory conditions are, is now more important to Google than anything. 

It doesn't have to be like that.

Google is an advertising company. It can't be said enough. If 78 per cent of your revenue is advertising, then you are an advertising company. It's now an advertising company that has been drawn into a fight in an area it did not choose, involving a technology over which it was too cautious, and had fallen behind in developing.

Having committed huge resources in order to catch up, the business now finds itself having to do a hard AI  upsell in order to generate the customer revenue to justify this pivot. Everyone who uses almost any application with any regularity cannot feel a little peeved each time this type of enforced AI value is pushed on them. The omnipresent AI pop up does indeed have the feel of Clippy. An enhanced, more malevolent, more insistent, Clippy. 

As Google trials and adds more such AI search features for us to try and ignore, why is it that they've lost sight of what they do, or did, best. Index content like no one else, and sell advertising against it. 

They could leverage the one thing they have that OpenAI doesn't - some kind of existing relationship with publishers. It might not be a good relationship currently, but there are at least the elements of familiarity and lines of communication. Then Google could outflank OpenAI as the business with the better relationship with those who make content. Even a small improvement would yield positive results. 

There's a meaningful way in which publishers are Google's Reddit users. Without the content, there is no value, yet and bizarrely, that's the very part of the company's commercial search equation that they treat with most contempt. Strange, especially when you think that YouTube, owned by Google, while not a perfect platform, is a platform that understands the value of the content that keeps it relevant.

Speaking to a recently exited Googler in the past few weeks, they observed that the push to AI had caused the unit he was working in to lose focus, with the decision making chain becoming vaguer, as senior managers tried to second guess what was going to be required to please those above them.

Most publishers haven't even had the wine-and-dine experience Reddit briefly got from Mountain View, and if they did, they would be suspicious based on past experiences. It's that gulf of trust, or even regard, that Google could choose to close with publishers.

Let's not forget, industry groups such as the Public Interest News Foundation have estimated that just in the UK alone, "Google generated £16.7bn from search advertising in the UK in 2023, of which £5.6bn was generated by information searches with the help of news media".

Almost none of that revenue returns to publishers.

As AI Clippy might say "Do you want me to summarise that?"

No, we just want our money.