Search is BIG business. Look no further than Google’s business model.

From billions and billions of innocuous and sometimes random strings of keywords comes Ads, and those Ads produce $Billions for Google each quarter. They still dominate the market with 90% market share in search, globally.

Search, AI & Product Discovery

Google Search is Not Dead (Yet)

When ChatGPT came out in late 2022, many declared that ‘Google was dead.’ Well not exactly. Our analysis looked at the ‘Threads of Search’ and the different “threads” that could unravel to begin to crack Google’s search dominance and empire business model.

As we enter 2024, we can see from the graphic below that roughly 13- 15% among Gen Z, Millennials, and Gen X use ‘AI chatbots like ChatGPT’ to search, while ~60% of those same demographics continue to use search engines.

Google itself has Bard and is planning to roll out SGE (Search Generative Experience), so search engines and AI Chatbots may ‘fuse’ in the future. Whether Google ends up at the top of the heap remains to be seen.

Competition from Apple (due to the Safari browser market penetration) is a complex matter that deals with huge sums of money and anti-trust investigations. Whether Big Tech competition like Microsoft, or some upstart startup could somehow upend Google’s dominance in search through simple technological innovation seems plausible, but challenging.

But what stands out in the above graphic is Gen Z + Millennials continued usage of ‘social media’ as a mechanism of search. In particular, we can surmise that this has a lot to do with TikTok’s continued surge.

Last year Google partnered with TikTok to create cross-functional search experiences. TikTok also launched TikTok Shop late last year in the U.S.

It stands to reason that Gen Z and Millennials are likely using TikTok for search around product & service-based queries, rather than queries like ‘directions to X.’

We look deeper into the implications of this as we enter the AI Era of Search & Product Discovery.

The long and short of it is that, nowadays, creating a viral video on TikTok is likely to become one of the most effective SEO activities. Why?

  • Google is partnered with TikTok, so some TikTok videos will start to show up in search queries – the #Hashtagging on TikTok videos can help rank in Google SEO
  • When a video goes viral, people search the product and corresponding terms on Google, etc, creating a loop in the algorithm for all content associated with those terms
  • Progressively, video + other visual media starts to become a more context-rich source for information related to products and services than articles

Simply put, people trust other people and the TikTok videos are people, worldwide, sharing their sometimes serious, sometimes quirky takes about the products and services that they use in their everyday life.

With TikTok Shop rolling out, we know that a lot of the viral videos are Ads created by Creators/Influencers on behalf of brands. They earn money in affiliate commissions, so the more viral the video, the more they get paid.

Thus in the TikTok Search bar, if one types in ‘fashion trends 2024,’ then an array of videos will come up, some of which will technically be Ads.

In a sense, this is a model that is not that different to Google’s own business model built on top of its Search Engine + Ads.

But with the $Trillions being spent annually for Ads + SEO for eCommerce for retail, health, homeware, etc., the action is clearly on the sites that combine social + commerce (social commerce).

Social Commerce has barely warmed up in the West, and ‘Social Search’ is a compelling intersection for this trend, as the search results are now directly listed to the stores that sell the product (on TikTok), rather than having to click through to Ads on Google (& Meta).

In light of research showing that younger generations, in particular, trust Creators/Influencers as much as their family/friends for product recommendations, it seems possible that TikTok and its competition become the de-facto ‘product discovery’ search engines.

But when it comes to more practical day-to-day searches (like the weather), or for knowledge, depth on complex subjects, etc. it’s not going to be TikTok.

The GenAI Search Upstart – Perplexity.AI

Perplexity.ai is one of the ‘AI Chatbot upstarts’ that seems to have gained the most traction in the market, having recently raised $73.6 Million in financing from a network of heavy-hitting investors including Jeff Bezos and NVIDIA.

The belief is that they can create a niche (see Dominate a Niche) and exploit that edge progressively over time to compete with the giants. At their current (paper) valuation, they are worth ~ $0.5 Billion, while Google is worth a cool $1.5 Trillion, or about 300X.

That perspective helps show how big an uphill battle it is to even think about ‘new search experiences,’ but by all accounts, Perplexity is doing a great job at it.

Perplexity is not just a ‘wrapper’ either. No “wrapper” will grow to 100 Million MAUs (Monthly Active Users) in 18 months, there is a true innovation beneath the surface of Perplexity. What makes it stand out?

Perplexity.ai’s business model, at the moment, is Subscription, charging users $20 a month to subscribe to the ‘Perplexity Pro‘ service than enables ‘power usage’ of the product.

It stands out from systems like Gemini, GPT-4, Bard, and Microsoft’s Copilot by focusing on detailed, reliable source-based answers and enhancing the search experience.

Medium – Fabio Lalli

Perplexity.ai pulls data from multiple, diverse sources and synthesize it, presenting it as one cohesive answer. This type of ‘Generative Search’ (Generative AI) is a very unique user experience compared to what we are accustomed to with Google; and it is clearly a preferred outlet for those seeking answers to more complex subjects.

In the Perplexity Pro subscription, they allow users to query up to 300X using “CoPilot” (research) and choose their preferred ‘AI Model’ for the search (GPT-4, etc.).

Here is an example of a query on ‘quantum computing’ using the Perplexity CoPilot.

Perplexity AI - Quantum Computing Query

We can see how the application uses a variety of sources (all listed) to piece together one cohesive answer.

Both in terms of design and vision for the future, this is not a product designed to give product and service recommendations; therefore, Perplexity has the potential to revolutionize Search for knowledge+, but many will still look to Google, TikTok, and other engines for product recommendations.

Trust & Product Recommendations

Recommendations from family and friends are the most bankable for all generations; the only caveat is that Gen Z is progressively trusting Influencers for recommendations about what to purchase.

Millennials are less inclined than Gen Z to buy directly off Creator or Influencers via TikTok short-form videos (or equivalent), yet almost half of both Millennials and Gen Z have bought products based on what they saw on a livestream.

Video (asynchronous or live) shift mindsets about products and services.

A recent survey (Sept. ’23) showed the reason why TikTok is the preferred search engine to Google for Gen Z:

TikTok is the #1 search engine for more than half of Gen Z. Overall, 74% of Gen Z uses TikTok search. And 51% of survey respondents chose TikTok over Google as their search engine. The three biggest reasons: The video format of the results (69%); More relatable answers (65%); Personalized answers (47%).

Search Engine Land

Video (seeing real people), relatable answers (clear language), and personalization all fit with why it seems likely this trend will continue.

There are many other “niche” search platforms such as Amazon, Instacart, and others where consumers can look for ‘trust signals’ about what to purchase and why – from reviews (social proof) to quality of sourcing (renowned brands).

Video may be the biggest factor, however, and research into Livestreaming, Community & Commerce shows how a feeling of connection to an Influencer or Creator can occur even remotely via video.

Humans can build trust in different ways, and so it’s no longer about trusting Google or other mainstream search platforms for product and service recommendations, but rather a more ‘Social Search’ on TikTok and other video-centric platforms.

“Just Google It?”

What if in the future we say “TikTok it” or “Perplexity It?”

Those may not be the winners in the end , but are we coming to the end of an era of saying “Just Google It?”

A lot will depend on what we search. TikTok and other niche networks are excellent for finding product recommendations, whereas Perplexity and new search engines are focused more on knowledge and advancement.

Google’s core search product will adapt over time, and other Big Tech companies will increasingly enter the ring, whether Microsoft, Apple or others.

It does, however, seem plausible that threads of Google’s search dominance are about to be pulled.

More Search + Commerce Posts

Search Engine Business Model

TikTok + Google Partnership – “Social Search”

Brands, Digital Ads & Social Commerce

Video Ads Business Model