Alphabet’s stock, the parent company of Google, has decreased following reports that Samsung may switch to Microsoft Bing as the default search engine on its smartphones.
Samsung is reportedly considering a switch from Google to Microsoft Bing as the default search engine on its smartphones, which has caused Alphabet’s stock to drop by over 3.5% following reports from The New York Times.
Specifically, Samsung may be preparing to replace the default search engine on its Galaxy smartphones from Google Search to Microsoft Bing. This potential move by the world’s largest Android smartphone manufacturer to remove Google’s flagship product is not favorable for the U.S. technology company.
Bing, along with ChatGPT and Google Bard, has long reopened what many consider to be a closed debate around the best search engine. Now, The New York Times has reported that Samsung is currently in negotiations with Microsoft to feature Bing on its future devices.
This puts the existing contract between Samsung and Google, worth about $3 billion annually, at risk. The deal between Alphabet and the world’s leading smartphone manufacturer is being negotiated, and Samsung may still maintain some form of association with Google.
While it is still possible to download Chrome and use Google on Samsung devices, if this deal goes through, they will not be pre-installed as the default search engine. Meanwhile, Samsung phones typically use the Samsung Internet browser, which is itself a Chromium-based open-source browser, so this may also change soon.
Immediately after this information was released, Alphabet’s stock price dropped by over 3.5% on April 17th, following The New York Times report that Samsung is considering dropping Google as its default search engine on its phones in favor of Microsoft’s Bing. At the same time, Microsoft’s stock closed at an increase of about 1.7%.
Google pays billions of dollars each year to smartphone manufacturers, including a reported $20 billion annually to Apple alone, to serve as the default search engine. In return, the search company earns billions of dollars from advertising, which has long been Google’s profit center.
Now, with Samsung being a major Android manufacturer, and news that Samsung is considering a switch to Bing, it has reportedly caught Google employees by surprise.
“Wow, OK, can’t believe it”, a Google employee reacted to this news.
It is known that the threat of Bing to Google’s search dominance has escalated in recent months with the incorporation of OpenAI’s technology to provide ChatGPT-like responses to user queries.
Google is also undertaking projects to update and refresh its search services to avoid losing its position. This includes adding artificial intelligence features to its existing services, in a project called Magi, which involves over 160 people working on it.
Lara Levin, spokesperson for Google, stated in a statement: “Google is excited about bringing new AI-powered features to search and will soon share more detailed information.” A Google representative declined to comment on the company’s negotiations with Samsung. A representative from Samsung also declined to comment on this information.
With agreements with Samsung and a separate deal with Apple worth an estimated annual revenue of around $20 billion, Google has dominated the mobile device market in the United States and a significant portion of other countries worldwide.