Google eyes ‘premium’ AI features to revamp business model

Google is reportedly considering the introduction of paid “premium” features powered by generative AI to its search engine, The Financial Times reported on April 2.

Sources close to the matter told the newspaper that Google is exploring the possibility of incorporating AI-enhanced search capabilities into its existing suite of premium subscription services.

The suite already includes access to Google’s latest AI innovations, such as the Gemini AI assistant integrated within Gmail and Google Docs.

While the technological infrastructure for these premium features is under development, Google’s executive team has yet to make a final decision on the launch and its specifics.

Shifting away from ad revenue

Despite the proposed changes, Google’s traditional search functionalities are expected to remain freely accessible, with advertisements continuing to accompany search results — even for subscribers.

The potential shift to a paid model will be a significant departure for Google, which has historically provided consumer services free of charge, relying solely on advertising revenues.

According to the report, the company is not considering an ad-free search experience but is committed to developing new premium capabilities and services to enhance its subscription offerings.

The tech giant highlighted its ongoing efforts to reinvent search to meet evolving user needs through generative AI, indicating substantial query growth in major markets without confirming any specific plans for the future.

Google’s search and related advertising ventures generated $175 billion during 2023, accounting for over half of its total revenue. This poses a strategic dilemma for the company: adopting cutting-edge AI innovations without jeopardizing its most lucrative revenue source.

Experimental SGE services

The strategic consideration comes at a time when Google’s advertising business faces potential disruption from advanced AI technologies, nearly a year and a half following the launch of OpenAI’s ChatGPT.

In response, Google launched an experimental AI-powered search service in May 2023, aiming to offer more detailed answers while maintaining the provision of links and advertisements. However, it has been slow to adopt features from its “Search Generative Experience” (SGE) into the main search engine.

The use of generative AI in search results requires significantly more computing resources, making these advanced features more costly for Google to provide. Currently, access to SGE is limited to a select group of users, including some subscribers to the Google One service.

SGE provides various features, including the ability to ask more complex questions, receive topic snapshots, and follow up on results, plus creative tools. The service introduced AI image generation in October 2023, providing functionality similar to a Midjourney and other apps.

Regardless of how Google’s AI-powered services develop, the company will inevitably compete with OpenAI’s ChatGPT and Microsoft’s Bing AI, both of which have established revenue models combining free and premium access to content.

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• Source: https://cryptoslate.com/google-considering-major-shift-in-business-model-via-paid-premium-ai-features/