No. of Recommendations: 10
I’m not as confident as you about its alleged moats, and I’m really concerned about the cash flow draining away on a big bet around AI. I agree that Gemini seems to be insinuating its way throughout the search function, but how will they monetize the AI investment? It seems like the capital costs of retaining ad revs have just increased a lot making search a much lower margin business.
Sundar Pichai has touched on this issue various times. He says AI queries are deeper and longer than regular searches, so the ad placement is better and leads to higher click throughs. And the ad placement goes across all their platforms. Youtube, Gmail, etc. He's also said in not so many words that they want the AI user experience to be good first, then the monetization will follow.
This is relevant suaspontemark's point about privacy: There isn't any.
