AI is stealing clicks, Google's war vs publishers, Google's long-term strategy & more

So this is a question I know you've already answered ad nauseam. Forgive me, because we are the paid guys. So this is the paid guys asking the organic guys the novice question when it comes to AI. But AI is nothing but stolen clicks, right? AI, it's ChatGPT taking your content, it's Search Generative Experience taking your content. Dude, Google's SGE, if you've played with it, is amazing.

It is.

But it's content that Neil or Eric wrote Being delivered by an AI bot in context that really never exposes you to me. So how much, how much of that do you think ends up siphoning off the high-value traffic you would have gotten otherwise?

I think a lot of those questions, the SGE type of stuff, if you're a big corporation and you're looking to hire someone, You're not going to take an SGE response and hire someone on a million-dollar contract. You're going to dig deeper and talk to someone on the phone, right?

But do you get to that person on the phone through the SGE search, or is the, you know, the iterative process by which you identify that consultant, does it go a different route, or do you think it still goes to them searching for the citation?

I think it goes from them searching. They may see the SGE response. And they're like, who's this by? Let me just go talk to the company.

Okay.

Yeah. And by the way, we've talked about this a little bit where we were just saying, hey, you know, like at the end of the day, Google has that publisher relationship. Like that's still going to be there. There's like this tense relationship right now, right? They still need to give some like bread to the publishers themselves. So I think the citations will be probably clear and they'll say, hey, like we got this from over here. You should click on this website. But I think, Kasim, your question is more around like, what are people going to do about this?

Well, actually, let's just—

why would I create content if the AI is just going to steal my content and then, and then provide answers based— and I know they're trying to play the citation game, but even the way they— even the way the citations are provided inside of SGE, it's here are my answers and here are the 5 sites I stole this from. And what's interesting about that is it's usually like one of you guys and you provided 80% of the answers and then 4 Yahoos that just lucked out and got put in the bundle with you. And so now the 4 Yahoos look like they provided way more value than they did, and the majority of the value came from you. But Google's not going to say that or show that. And, and, and I say that because there's actually a separate frame in the SG if you've seen it. There's— here's all the citations we used, and if you swap over to the separate frame, here's on an almost per-sentence basis the citation responsible for the response. So they're trying desperately to cite the original source in-app, in context. But I have to seek that citation out to get it. And I don't know that the unsophisticated buyer does that. And Neil, your response is, well, the sophisticated buyer does it. And that's all I care about is what I'm hearing.

I'll actually give you 2 examples and this will answer it. Okay. So the first one is, is SGE isn't perfect and it's iterations of what is already there. You type in the weather in Las Vegas, Nevada, or Los Angeles, it shows you what the weather is now. You know, years ago, 10 years ago, I don't know the exact timeframe, but let's say 15 years ago, you would say, type in Los Angeles weather, and then you'd click on weather.com, and then you would see the weather. All right?

Right.

Now you're showing the weather. You type in 2 2, or what's USD to British pounds? It shows you the currency exchange, or it shows you the answer right then and there. But overall, if you look at what Danny Sullivan from Google said, Google has continually driven more clicks each and every single year to websites. Because as they improve the experience, they're getting more people using the search engine and a smaller percentage click through the website, but the total number is still greater. And what you're also seeing is their schema markup, or not schema markup, when they're putting the knowledge graph there, when they're giving you some of the answers, in many cases, it's actually not that great. Yes, sometimes SGE is great, sometimes it's not, because a lot of the places where they're pulling the answers from, the content's crap, which is creating crap responses.

Mm-hmm.

Right? So that's one. But do I think it'll affect websites' traffic? Yes. I don't know by how much though. The second one, and this is answering more of the question, but this is a second point. You guys are paid ad guys. Did you know that Google makes a bit more than $30 billion a year from their partner network? $30+ billion a year. How do you think those sites get their traffic? They're not buying money from— they're not spending money on paid ads to get traffic to then send it back to Google. That's a losing battle. I know some businesses have done well building that, but it's far and few in between and they never last, right? That's a really terrible model. It's hard because buying traffic from Google and sending it back or buying it from Yahoo and then sending it to Google, it's a tough business, right? It's not something—

Yeah, there's no arbitrage left anymore.

Yeah, very little to none for most industries.

Right.

Google's not just— so they're getting their traffic not from social media because social media doesn't keep giving evergreen traffic. They're getting it from SEO. I'm not saying Google isn't going to play with SEO and mess around with it. They definitely are. They always have been for a long time. But you think they're—

it's—

they can report to the public, yeah, we just killed all the SEO results. And oh, by the way, it affected that $30 billion that we generated in revenue and we're going to make it up, but we don't know how much yet and how that's going to work.

It's not that simple for them. So my counter to that is I think that Google is smart enough to play the long— here's what I mean. Google will sacrifice near-term earnings in order to make sure that they're not replaced. So if Google tomorrow has to roll out an app that kills all of Google Search, which is its most important ecosystem and infrastructure, period, to make sure that it stays the primary utility with which you ask, with the assumption that it will learn how to monetize it later, I think it would flatten all of its revenue to do that as opposed to watch the slow death and atrophy.

They won't. Companies owned by hedge funds and institutions. They'll fire the executives and CEOs for crushing their earnings. What I think will more realistically happen, and this has been Google's playbook, they'll try tons of changes and they'll implement them for like 0.1% of the users searching.

And then make us their beta testers.

Yes. And then they keep doing that until they got a winning formula to make more revenue than what they're going to end up losing. That's typically been their playbook. And I see them continually doing that. But you're— what feeds Google is content creators. If they just cut off all the traffic and they just answer everything for users, everyone's just going to block Google and then their search engine is screwed either way. They can't just cut the traffic off. It goes both ways.

Yeah, they can't break that money printer. Yeah, they're too disincentivized to break it. So they're going to be the slowest to change things while everyone else is like Perplexity and all these other people are starting to run laps around them.