“There is such a margin in search, which for us is incremental. For Google it’s not; they have to defend it all, and from now on, the gross margin of search is going to drop forever,” With these words, Satya Nadella the CEO of Microsoft, declared the “Search Wars” started.

What’s happening: Microsoft recently announced the release of the new Bing search engine, declaring it to now be an AI powered copilot for the web. These improvements have also been applied to Edge, the company's flagship browser. Microsoft estimates that of the 10 billion search requests made daily, 50% go unanswered. It believes this is because people have evolved to use search beyond its origin. While search is great for looking for websites, it’s terrible at providing exact answers to complex questions and tasks. With the new Bing using ChatGPT-like technology, it aims to make the search experience more wholesome. 

This is projected to be a shock move against Google, which currently holds 92% of the search engine market with Microsoft holding only 3%. With this move, Microsoft is aiming to upend the search market and claim dominance.

What is the new search experience? The new search experience wants to bring browsing, search, and chat into a seamless blend, and here’s how it’ll look on the new Bing:

• Better search: More relevant results on things like sports scores, stock prices, and weather will be shown as well as more indepth information for those who want it
• Complete answers: Search queries will no longer bring only search results for pages likely to have them. Now you’ll get complete answers to your queries immediately becaue Bing will review the web for answers and summarize them without you having to scroll through multiple answers.
• Interactive chat: For more complex searches, Bing will allow you refine your queries by asking for more clarity, details and idea until yu get an answer you’re satisfied with. It’ll also provide links with details so you can act on your decisions quickly.
• Creative prompts: Just like OpenAi’s ChatGPT, the new bing will be able to give you a creative spark. It can write emails, copy, speeches and even help you plan meetings, vacations, and lots more. It’ll also cite it’s sources unlike ChatGPT so you’re sure of what you’re getting.

Where’s Google in all this? Google has been described as a slow-moving giant in this race by many users. Despite being the lead search engine, Google has been slow to roll out new changes. In the past week, Google announced Bard, a conversational AI based on its proprietary language model LaMDA. But this is still only available to testers and not the general public. 

Google says that Bard, which competes with OpenAI's ChatGPT, tries to combine the breadth of the world's knowledge with the power, intelligence, and creativity of its large language model, drawing on information from the web to provide fresh, high-quality responses. Going further to say in a blogpost that “Bard can be an outlet for creativity, and a launchpad for curiosity, helping you to explain new discoveries from NASA’s James Webb Space Telescope to a 9-year-old or learn more about the best strikers in football right now, and then get drills to build your skills.”

While we wait with baited breaths to see the functionality and limitations of Bard, we still haven’t been given a glimpse of what a new search experience will look like if Google goes ahead and integrates it into its search engine.

How will AI powered search change the ads business: A major discussion that is brewing is how AI enhanced search will change the ads business. As has been widely said, Google is in the ads business primarily, with about $150 billion generated in the past year, collecting 29% of all digital ad spending worldwide. Of these, over 80% are generated from its search business alone. But from the previews of the new Bing, only a few ads are shown on some chat queries but not others. This comes as no surprise as Microsoft, which has no ads empire to protect, is willing to let go of some revenue to take market share from Google. 

Where to from here: The Search Wars are just starting, and what this will mean for advertising and revenue generation is yet to be fully understood. Will being able to find exact answers to our questions cut down on the time we spend clicking on links and making them money from ads? How will companies earn from ads at this rate? All these and more are information we are eagerly awaiting as leading tech companies fine-tune their tech and business models.

• Analyze edge cases
• Look up data similar to edge cases, based on algorithms
• Extract particular data that represent the whole
• Therefore, save time and cost

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