S&P Global — 29 May 2024
Daily Update: May 29, 2024
AI-Enabled Search Spells Trouble for Digital Publishers
By Nathan Hunt
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For decades, Google and the digital publishing industry have had mutually supportive business models. Digital publishers have allowed their content to be crawled by Google. In fact, they have optimized their content to match the needs of Google’s search algorithm. Google, in turn, has referred traffic to these digital publishers through its search platform. Google and the digital publishing industry have optimized this traffic through ads, both on the search platform and on publisher websites.
However, AI-enabled search signals the end of this system of mutual support and dependency. AI-enabled search generates answers to search queries on the Google platform, eliminating the need to refer organic search traffic to publisher websites. The traffic can be retained by Google or monetized through paid search.
According to S&P Global Ratings, the rollout of AI Overviews on the Google search platform will impact some digital publishers more than others. Publishers with more organic traffic and greater name recognition will retain an advantage over publishers who depend on paid traffic from third parties.
Google, the largest search engine platform, has a global market share of more than 90%. Most publishers depend on Google search for some amount of the traffic they monetize. Changes to the Google search algorithm over the years have resulted in some websites receiving more or less traffic. Digital publishers try to stay abreast of Google search algorithm changes to retain traffic.
Digital publishers have raised concerns that AI-enabled search uses their intellectual property as a large language model to train AI engines. Some are seeking relief from Google and other search platforms through litigation and legislation. The New York Times and eight newspapers owned by Alden Global Capital have each sued OpenAI and Microsoft for copyright infringement. Google and Meta have both appeared reluctant to pay for licensed content from news organizations. A prior agreement between Meta and a group of more than 30 news organizations was allowed to lapse this year.
Google has insisted that its AI Overviews prompt users to visit a greater diversity of websites for help with more complex questions, and that the links included in AI Overviews got more clicks. However, S&P Global Ratings has expressed skepticism and believes that traffic to digital publishers is likely to decline. No immediate rating actions have been taken, pending more information about the long-term impacts of AI-enabled search.
Today is Wednesday, May 29, 2024, and here is today’s essential intelligence.
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—Read the article from S&P Global Commodity Insights
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The flash PMI data for May from S&P Global brought encouraging news on economic growth, with output of the combined manufacturing and service sectors rising across the four major developed economies — the “G4” — at the fastest rate for a year. Inflation pressures meanwhile eased, down to one of the lowest levels for over three years. The rate of inflation signaled nevertheless remained stubbornly by pre-pandemic standards, having been stuck in a narrow but elevated range over the past year. There were, however, some notable variations in the growth, and most importantly, the inflation trends among the four economies.
—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Commodity Insights
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—Read the article from S&P Global Commodity Insights
Listen: Next In Tech Bonus Episode: RSA Conference Special Report
In this special report from the RSA Conference, we hear from seven of the team who were there at the event. It’s a set of quick takes on the latest trends and take aways from the conference in discussions with host Eric Hanselman. Whether it’s AI, cybersecurity or M&A, there was a lot going on and a lot to sort out.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
2024 South Africa Conference: Between A Rock And A Hard Place (June 4, 2024)
This event will discuss potential policy shifts following the May general elections, sovereign-bank nexus in light of the implementation of a resolution regime and S&P Global Ratings’ outlook on South African corporates. Hear from S&P Global Ratings' senior analysts, renowned industry experts, engage in interactive panel discussions and connect with other market participants in person.
—Register for the in-person event from S&P Global Ratings