Alphabet shares fell over 4 percent in premarket trading on
Monday after a report that South Korea's Samsung Electronics was considering
replacing Google with Microsoft-owned Bing as the default search engine on its
devices.
The report, published by the New York Times over the
weekend, underscores the growing challenges Google's $162-billion a-year search
engine business face from Bing — a minor player that has risen in prominence
recently after the integration of the artificial intelligence tech behind
ChatGPT.
Google's reaction to the threat was "panic" as the
company earns an estimated $3 billion in annual revenue from the Samsung
contract, the report said, citing internal messages.
Another $20 billion is tied to a similar Apple contract that
will be up for renewal this year, the report added.
Alphabet and Samsung did not immediately respond to Reuters'
requests for comment.
Google has for decades dominated the search market with a
share of over 80 percent, but Wall Street fears the company could be falling
behind Microsoft in a fast-moving AI race.
Parent firm Alphabet lost $100 billion in value on February
8 after its new chatbot, Bard, shared inaccurate information in a promotional
video and a company event failed to dazzle.
On Monday, the stock was trading down at $104.50, while
Microsoft outperformed the broader market with a rise of 1.9 percent.
"Investors worry Google has become a lazy monopolist in
search and the developments of the last couple of months have served as a
wake-up call," Atlantic Equities analyst James Cordwell said.
Cordwell added the potential costs tied to making Google
Search more competitive than AI-powered Bing could also be a cause of concern.
The NYT report said Google was racing to build an all-new
AI-powered search engine that would offer a more personalized experience than
its current service, which is also set to be upgraded with AI features. ©
Reuters