Apple's plans to add AI-powered search options to its Safari browser are a big blow to Google, whose lucrative advertising business relies significantly on iPhone customers using its search engine.
The news slammed shares of Google-parent Alphabet, which closed down 7.3%, wiping off roughly $150 billion from its market value, reports Reuters.
The iPhone maker was "actively looking at" reshaping Safari, a source familiar with the matter told Reuters, citing Apple executive Eddy Cue who was offering testimony at an antitrust case on Wednesday over Google's dominance in online search.
Cue said searches on Safari fell for the first time last month due to users increasingly turning to AI, according to the source. Apple stock closed down 1.1%.
Google said that it continued to see growth in the overall number of search queries, including "total queries coming from Apple's devices and platforms," according to a statement posted on the company's blog.
"People are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways," the company wrote.
Google cited voice and visual search features as contributors to total search volume growth. It was unclear whether Cue was using the same basis of comparison in his testimony when analysing types of searches.
Still, the Apple executive's comments suggests that a seismic shift in search is likely underway, threatening Google's dominant search business - a go-to advertising destination for marketers that has now become a target for U.S. antitrust regulators, which filed two major lawsuits against the company.
Google is the default search engine on Apple's browser, a coveted position for which it pays the iPhone maker roughly $20 billion a year, or about 36% of its search advertising revenue generated through the Safari browser, analysts have estimated.
Banning Google from paying companies to be the default search engine is among the remedies that the U.S. Justice Department has proposed to break up its dominance in online search.
"The loss of exclusivity at Apple should have very severe consequences for Google even if there are no further measures," D.A. Davidson analyst Gil Luria said.
"Many advertisers have all of their search advertising with Google because it is practically a monopoly with almost 90% share. If there were other viable alternatives for search, many advertisers could move much of their ad budgets away from Google," Luria said.
Bd-pratidin English/ Afia
