Google slides on Samsung switching to Bing for search

After reports surfaced yesterday that Samsung Electronics Co. may be considering replacing Google with Microsoft's Bing as the default search engine on its devices as a result of its inquiry about replacing Google with its own search engine, Google, Alphabet Inc. was heading for its biggest single-day decline in over two months.

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New York Times reported on Sunday that employees at Google were shocked to learn of Samsung's threat in March, citing internal messages that were sent to employees. According to the New York Times, Alphabet and the world's leading smartphone manufacturer are currently in the midst of a contract negotiation, and Samsung could still stick with Google in the future. 

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As trading got underway in New York, Alphabet shares plunged as much as 4% as trading got underway. There is a strong possibility the stock will suffer its biggest decline since early February if the losses hold throughout the day. There was an increase of 1.7% in Microsoft's stock price.

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Since the addition of OpenAI to Bing's technology offering ChatGPT-like responses to user queries, Bing's threat to Google's search dominance has escalated in recent months, with the company threatening Google's dominance even further.

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Google has been working on several projects to update and renew its search services in order to maintain a competitive edge in the market. One of the changes is adding artificial intelligence features to the company's existing offerings, under a project called Magi, which is being worked on by more than 160 individuals, according to The New York Times. 

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Lara Levin, a Google spokesperson, said in a statement that the company is "excited" about bringing new AI-powered features to search and that more information will be shared soon. According to Google's representative, the company has not commented on its negotiations with Samsung. Samsung's representative declined to comment on the matter.

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Samsung is expected to ship 261 million smartphones in 2022, according to IDC data, and all of these smartphones will run Google's Android operating system. There has been a long-standing partnership between Samsung Electronics and Google for many years now, and the Korean company's products come preloaded with a selection of apps and services from both, such as OneDrive and Google Maps. 

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Google has a commanding market share in mobile devices in the United States as well as most of the world, thanks to its Samsung deal as well as its deal with Apple Inc., which according to the Times report is worth roughly $20 billion in annual revenue.

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There is nothing new about Google's use of large language models, such as the one that underpins ChatGPT in addition to its integration with Microsoft's Bing chatbot feature. The company's chief business officer stated on the company's fourth-quarter earnings call in February that they have been using LLMs to anticipate users' queries based on the intent of their searches. Besides this, Google has also begun rolling out Bard, its own chatbot search assistant, at a much slower pace than it was doing before.