AI is a world changing technological innovation that will ultimately live up to its hype; and
AI is an utterly overblown technology that will fail to live up to its hype, leaving millions in financial ruin along the way.
After all, those two statements pretty much sum up the World Wide Web from the period between roughly 1996 and 2006. At the moment, it feels to me if we’re crossing the peak of AI’s hype cycle, and about to enter “the trough of disillusionment,” a period where a vaunted technology fails to live up to its early promises.
Back in the day when I was covering Google on a daily basis, I’d have spent hours poring over yesterday’s news that the judge in Google’s landmark antitrust case essentially blinked. But twenty-odd years of experience leaves me with very little to say about how Google’s first anti-trust case has been resolved, other than this: It’s a nothing burger, with a side of same-as-it-ever-was.
Over the course of nearly four years since the government brought its case, a lot has changed:
The United States has veered away from liberal democracy toward illiberal autocracy, and the current administration is no longer interested in grand antitrust remedies that serve the public. Today, everything is seen through the lens of whether a given action or decision furthers the President’s power. Preserving the status quo gives him leverage over powerful actors – he can continue to threaten and bully, ensuring fealty and tribute. In this administration, as in Moscow, Pyongyang and Beijing, no one is allowed to have more power than the Dear Leader.
As I laid out in my predictions nine months ago, the tech industry is now the most powerful force in politics outside the President, and its two most muscular companies – Apple and Google – did not want their duopoly upended. We’ll likely never know what soft-power backroom deals were cut to avoid what nearly every legal scholar felt was justified action by the government, but to think those dynamics didn’t impact this decision is to ignore the reality of my first point above.
OpenAI’s existence became a convenient foil. The emergence of generative AI has given Google (and the judge in this case) the ability to argue that the DOJ was fighting yesterday’s war. Sure, Google might have been a search monopolist, but look – OpenAI is proof that the market is always smarter than government regulators! Never mind the fact that search literally built the foundation for generative AI, or that generative AI is the natural evolution of search – a product that Google will continue to dominate now that government remedies have been rendered toothless.
Google – and its $20 billion partner Apple – are likely doing cartwheels today. Wall Street certainly is.
I’ve written a lot about AI lately, and I’ll admit, most of it is critical. Plenty of you have asked me why I’m so down on the sector. The crux of it is this: I think we’re approaching AI without considering history’s lessons, and because of that we’re failing to ask the questions that will matter as the technology becomes inextricably embedded in our culture.
Perhaps the most important question is metaphorical – what’s the best metaphor for how we interact with AI? We’ve got plenty of examples to chose from. Will our interactions with AI end up being like the PC – a personal device that we own and control? Or will it instead end up like social media or search (or worse, television) – a centralized service that is owned and controlled by large corporations?
(This piece is cross-posted from Signal360, where it first appeared)
OK, Google, What’s The Business Model?
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.” -Ernest Hemingway, The Sun Also Rises
If you work in marketing, Hemingway’s famous passage about bankruptcy will likely resonate. The launch of ChatGPT in 2022 prompted dire predictions that search’s role as a reliable driver of traffic and sales was coming to a close. For the past three years, however, those predictions seemed overwrought. Despite a slight dip in January, which proved temporary, Google has maintained a steady grip on 90 percent of search activity, and continues to direct a firehose of leads and commerce across the web.
But rather suddenly — in the past two months, in fact — it seems everything has changed. Google announced and immediately shipped “AI Mode,” its answer to OpenAI’s ChatGPT. The company had already implemented “AI Overviews” in 2024, essentially an evolution to its “One Box” feature that provides AI summaries for queries above Google’s familiar list of blue links. According to one study, those summaries are already responsible for a nearly 35 percent decline in outbound clicks — the lifeblood of traditional search engine marketing.
Google knows the question is no longer if AI is replacing search, but rather how quickly. Industry analyst Mary Meeker has an answer: AI adoption, she asserts, represents the fastest change in consumer behavior in the history of digital technology.
With AI Mode, Google has decided to push all in. The company understands that consumers are finding AI chatbots a superior search experience. One recent study found that “more than a quarter of Americans (27%) now use AI chatbots like ChatGPT instead of traditional search engines.” And consulting giant Bain found that “about 80 percent of consumers now rely on “zero-click” results in at least 40 percent of their searches.”
Google knows it’s taking a risk by moving quickly, but no matter what, it must keep its grip on the information-gathering habits of its billions of consumers. That leaves a major question unanswered: If search as we knew it is going away, what will replace search marketing as we knew it? What will supplant the time-honored practices of “SEO” and “SEM”?
If you’ve been exploring this question, you are most likely overwhelmed by a slew of firms, from early stage startups to massive agencies and consulting firms, all claiming an intuitive and familiar answer: “SEO, but for answer engines.”
Some call it “GEO,” short for “generative engine optimization,” and others have dubbed their solution “AEO,” for answer engine optimization. Regardless of nomenclature, the goal is the same: a set of best practices that position a product, service or brand to succeed in the brave new world of AI chatbots.
Chatbots “have been a huge wake up call,” says Pete Blackshaw, CEO of BrandRank.ai, a startup that helps brands adapt to what it calls the “answer economy.” “The trillion-dollar brand marketing industry is being severely disrupted by AI search, and marketers don’t know how to measure it, where to start, or how to win.”
It’s still early, but what’s already clear is that “winning” in AI search means playing a very different game. AI chatbots are the ultimate black boxes – even the companies that run them have no idea how the technology chooses its answers. That means marketers accustomed to precise dashboards of SEM and SEO-driven results must go back to basics. Blackshaw advises his clients to focus on understanding the content ecosystem that informs answer engines’ inputs. The often neglected brand website, for example, “is a fueling station for an AI chatbot,” he says.
Along with similar offerings from companies like Anvil and Profound, BrandRank offers dashboards to help clients understand how their brands are performing inside various answer engines like Perplexity, Claude, ChatGPT, and Google. Once you understand where you stand, you can get to work building out content strategies that might improve your brand’s performance overall.
If that sounds squishy, that’s because in an age of chatbots, it’s harder for brands to hide behind paid marketing. Answer engines scour a massive corpus of data to source their answers, and seem to favor community forums like Reddit or authoritative sites like Wikipedia — neither of which are particularly easy for marketers to influence.
“You can’t control how or when you’re going to be mentioned” in AI answer results, observes Bill Gross, the fabled inventor of paid search, now CEO of ProRata.ai. “There’s no statistics, no reporting.” Gross believes he has a solution: ProRata has developed a platform that builds AI-generated ad units that are contextual to the content of a particular chat. In short, Gross is building AdSense for AI – an approach that allows marketers to buy their way into the AI conversation. But it’s still early days — ProRata has yet to sign a major client like Claude or Perplexity.
In the end, what matters most will be how Google adapts its world-beating advertising services to the emerging experiences of AI chat. For now, Google is treating the various “surfaces” of its AI products as just another channel for its massive AdWords and AdSense businesses. But sometime soon, the company will be compelled to roll out AI-specific advertising units that are purpose built for AI conversations.
What might that look like? On that question, Google has so far remained mute. “Everyone thinks we know the answer to that question,” one source inside Google told me. “We might know more than many,” my source continued, but when it comes to what an AI version of AdWords might look like, an admission: “We don’t have a clue.”
Regardless of whether or not Google has a plan to pivot its $350 billion advertising business toward AI, the fact remains that hundreds of millions of consumers – in particular younger generations – now deploy AI-powered chatbots like OpenAI’s ChatGPT and Anthropic’s Claude to do everything from work-related research to more traditional search behaviors like comparing product reviews or finding new restaurants to visit. Oh, and on the horizon? AI agents that do the searching and possibly even the purchasing on behalf of consumers.
Given the pace and complexity of change, seasoned experts in search advise brand managers to move to a wartime footing. The rise of AI is likely to be “more impactful than the introduction of the Web in the mid 1990s,” said GoFundMe CEO Tim Cadogan, an industry veteran who ran search at Overture and Yahoo, then helmed OpenX during the rise of programmatic advertising. To win the day, marketers must be “extremely observant and agile,” he continued. “I don’t think any of us know what is going to happen. Whatever happens will happen very quickly. We have to be prepared to throw out the old ways of doing things.”
Cloudflare founders Matthew Prince and Michelle Zatlyn from a 2015 SXSW presentation (image)
There are precious few companies in the tech world that are willing to stick their necks out and “do the right thing,” and even fewer who both operate at Internet scale and enjoy Wall Street’s unabashed fandom.
In fact, I can only think of one: Cloudflare. And today, the $65 billion public company* announced a new policy that has the potential to tilt the balance of the Internet back toward the little guys. Starting this morning, Cloudflare will automatically block AI crawlers from copying the content of every website the company protects. And it’s doing it for free.
Back when the Internet was young, when the dot-com wave broke across the monied shoals of Wall Street opportunism, Gross built a world-changing company, took it public, then sold it for billions.
Image from “The White Collar Recession” – Salesforce
BULLSHIT!
That’s what I found myself yelling at a recent board meeting, unimpeded by my usual filters of propriety or self-restraint. But I couldn’t help myself. The board was debating whether AI was going to come for all of our jobs, and someone had just referenced an article which said it wouldn’t be long before AI was doing the work of most doctors, lawyers, and – this is where I broke – writers.
According to scholar Carlota Perez, one of tech’s most revered theorists, society regularly goes through technology-driven “revolutions.” These structural cycles can take fifty years or more, and are defined by core technologies which shape life as we know it. Her list of previous cycles include the Industrial Revolution; The Age of Steam and Railways; The Age of Steel, Electricity and Heavy Engineering; and The Age of Oil, the Automobile, and Mass Production.*
Back in the early 2000s, Perez has identified the Internet (more formally, ICT, or “information communications technologies”) as the dominant technological force driving our current age. Perez’s framing has been a favorite of pundits ever since – and has played a central role in the debate as to whether a much-hyped “Next Big Thing” – crypto, the metaverse, quantum computing – is merely a feature of an ongoing revolution, or the starting gun to an entirely new age.
This past week, Wall Street caught up with the rest of us and realized that Google has lost its monopoly grip on search. The trigger wasn’t Google losing an anti-trust case – that happened last summer. Nor was it the first ten days of Google’s ongoing search remedies trial. Instead, it was a statement just two days ago by an Apple executive, Eddie Cue, which led to an almost instantaneous panic amongst investors.
Cue told the court that consumers’ preference for using AI agents had led to a decline in search traffic inside Apple’s Safari browser (Google pays Apple more than $20 billion a year to secure that traffic – a major focal point of the government’s case).
Over the past 25 or so years, I’ve argued that Google has built a massive database of intentions – the aggregate result of every search ever entered, every page of results ever tendered, and every path taken (there’s a lot more to it, but that’s the key stuff). I’ve tracked this extraordinary artifact since 2003, and have come to believe that Google’s control over it has become a inhibitor to innovation and flourishing in our society.
The US government – yes, even this one – agrees with me. In the nearly three decades since Google first launched, the company has gone from champion of the open Internet to established monopolist whose principle business is protecting its profits. With the advent of consumer AI, that principle business is imperiled. Google is protecting a revenue stream that it must understand is no longer defensible, either by law or by practice.
Back in the day when I was covering Google on a daily basis, I’d have spent hours poring over yesterday’s news that the judge in Google’s landmark antitrust case 
[Second in a series, first post 