The news: Google’s search dominance is slipping as AI innovations threaten its ad business.

• Its global web visits declined 1% YoY in April, according to Similarweb data published by Adweek, compared with 182% growth for OpenAI’s ChatGPT and 181% for Perplexity. Google’s searches on Safari also dropped for the first time ever in April.
• In March, about 77% of all Google searches that triggered an AI Overview garnered zero clicks, which could dissuade advertisers from spending on the platform.

These changes to its search and ad businesses may be what prompted Google to offer voluntary buyouts to employees in those divisions earlier this week. The staff reduction could also be getting ahead of a potential Chrome divestment.

Catch-22: Expanding AI search options like AI Mode could help Google maintain a lead over ChatGPT. An internal memo noted that while the company is hoping Search’s dominance doesn’t erode, it would rather shift search traffic to Gemini than lose it to ChatGPT, per AdWeek. Doing so could weaken Google’s ad-driven search business, but it could preserve its search market share.

Part of Google’s ad business model is built on selling keywords to brands to assist with ad targeting and click-through rates (CTRs), but the presence of an AI Overview in search results leads to a 34.5% lower average CTR, per Ahrefs.