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Another day, another win for Google.
Any hopes within the online ad industry that the courts would make the search giant a weaker advertising competitor, or the industry less reliant on it, were dashed this week by Judge Amit P. Mehta.
Google escaped having to divest its Chrome browser or Android operating system, the biggest remedies sought by the US government in the tech giant’s landmark online search antitrust case. A breakup would have been a huge blow for Google’s advertising business, cutting off key distribution points that help it collect mountains of user data and sell high-value targeted advertising.
Google didn’t come out of the yearslong trial entirely unscathed: It will be barred from entering exclusive contracts with platforms like Apple to make it the default search engine on phones and browsers (Google can still strike non-exclusive deals to get products like search or Gemini preloaded, the judge said). It will also be forced to share some search data and syndication services with its rivals, though this doesn’t extend to advertising data.
Analysts generally saw Tuesday’s ruling as a best-case scenario for Google.
“For now, Google’s big fort on the hill is intact,” said Matt Wilké, head of digital partnerships at the media agency Mediaplus UK.
For the companies that make up the online advertising ecosystem, it’s a reminder that making money from selling ads on the web is getting harder every day. Google’s dominance in traditional search advertising remains. And the move to force Google to share its search data with generative AI rivals could accelerate traffic declines as users opt for chatbot answers over website clicks, ad industry insiders told Business Insider.
That’s bad for news websites, blogs, and other content publishers because it gives them fewer opportunities to serve ads.
“The decision is a huge win for Google and tough on the broader adtech ecosystem,” said Stephen Upstone, CEO of the adtech company LoopMe.
Google declined to comment. In a blog post published Tuesday, the company said the court had recognized that divesting Chrome and Android would have harmed consumers and partners. Google said it had concerns about user privacy related to its requirement to share search data with rivals.
Generative AI is the new search battleground — and publishers are backed into a corner
In his ruling, Judge Mehta considered the changing search landscape, as users increasingly turn to generative AI chatbots like ChatGPT, Perplexity, and Claude rather than traditional search engines to learn more about the world.
Online publishers are grappling with how this shift in behavior could reduce traffic to their sites, which has a knock-on effect on their ad revenue. Davide Rosamilia, vice president of products at the adtech company ID5, said the remedy imposed on Google to share search index and user-interaction data with competitors could strengthen the generative AI landscape at the expense of publishers.
“That means AI could more quickly bypass publisher sites altogether, pushing users into ‘zero-click’ journeys,” Rosamilia said. “Instead of Google’s walled garden, publishers could be staring at new ones built by giant AI companies, leaving publishers even further on the margins.”
Online publishers have also raised concerns that they have to let Google scrape their content for use in its generative AI products if they want their articles to appear on Google’s traditional search results pages. Danielle Coffey, CEO of the News/Media Alliance, said the publisher trade body was disappointed that Judge Mehta’s remedies didn’t include “an opt-out of AI” provision.
“That leaves us with little options in the use of our content and little to no revenue for our quality journalism,” Coffey said.
Advertisers, too, are having to adjust their strategies as AI tools become users’ first stop, said Mitchell Feldman, chief executive of the marketing agency Jam 7. While traditional search remains the most popular way for people to find information, it might be displaced sooner than anticipated, he added.
“The old model of buying attention through keyword auctions and hoping for clicks is eroding,” Feldman said.
Advertisers and Google remain interlocked
While the ruling eases Google’s grip just enough to let some search engines take nibbles at the edge, advertisers remain tied to Google for now, said Mediaplus UK’s Wilké.
Google is forecast to take a 25.5% share of the US digital ad market this year, according to EMARKETER. The majority of Google’s ad revenue is derived from search ads. There is an upside to Google avoiding the worst potential remedies: A wholesale breakup of Google could have caused short-term pain for advertisers as they readjusted their ad-buying strategies across a web of smaller players.
Analysts at Morgan Stanley said the data-sharing clauses in the antitrust ruling could be “somewhat benign” for Google’s business because it will still require extensive investment for competitors to turn its raw data into something appealing for consumers.
That’ll be challenging for the AI companies because of Google’s scale and the way in which it’s already shown to improve and personalize its generative AI offerings, Morgan Stanley’s analysts wrote in a research note on Wednesday. Google would have been more affected were it forced to share more proprietary data sets like its search page rank or ads data, which could help competitors optimize their own products, the analysts said.
Shares of Google’s parent company, Alphabet, rose about 8% in morning trading on Wednesday as investors digested the impact — and upside — of Judge Mehta’s ruling.
The ad industry’s attention now turns to another landmark Google antitrust case, also brought by the Department of Justice. Earlier this year, a federal judge ruled that Google holds an illegal monopoly in certain online adtech markets.
The remedies portion of the trial is set to begin later this month, and the court could potentially force a breakup of Google’s adtech business. Such a breakup could reshape the open web display ad market, which by one estimate accounts for about $48 billion of ad spending in the US. That would boost adtech rivals like The Trade Desk and OpenX.
“This is critical, as this technology serves as a gatekeeper” for the online ad ecosystem, said Mateusz Rumiński, vice president of product at the adtech company PrimeAudience.
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