Alphabet Inc (NASDAQ:GOOG)-owned Google grew its share of the global search market by 5 basis points in January as it faces potential competition from new AI entrants, new data from Statcounter indicates.
However, Google has seen its share of global search fall by 169 basis points year-over-year, while Bing has gained 51 basis points over the same period.
Google’s traffic in January was stable while new AI platforms continue to grow. In terms of daily web visits, Google saw a 1% month-over-month increase to 2.7 billion, while Chat GPT was up 4% month-over-month.
Analysts at Bank of America believe daily web visits could be a better measure of AI competition on Google to reflect the impact of new entrants such as ChatGPT and Perplexity, which were not included in search share data.
“So far, ChatGPT and other AI based engines do not appear to be materially impacting Google search traffic or share but could be capturing a healthy share of incremental AI driven activity,” they wrote.
They highlighted that among new AI platforms, data shows healthy growth but combined daily web traffic is less than 0.3% of Google visits.
“In January, Perplexity global traffic was up 279% year-over-year (up 6% month-over-month) to 3.2 million, and Claude was up 439% year-over-year (up 4% month-over-month) to 2.5 million,” analysts wrote.
They added that traffic data is estimates and on it fourth quarter earnings call, Google’s management emphasized “healthy” growth in search volumes boosted by AI overviews and Circle to search.
“Overall, we are not seeing a boost to Google's traffic from AI Overviews, but also not seeing a major headwind from emerging AI search competition,” they wrote. “Given that Q4 was another quarter of strong search revenue growth, we remain constructive on AI monetization benefits for Google search and maintain our ‘Buy’ rating.”
The analysts have a $225 price target on Alpahbet, which traded hands at about $187 shortly before Tuesday's closing bell.