Google: Open Web is in “Rapid Decline”

In a legal filing tied to U.S. v. Google (advertising), Google admitted something it had publicly denied: The web is in “rapid decline” thanks to new AI tools that scrape all the web’s content and provide summaries and other ways to indirectly access it.

“The fact is that today, the open web is already in rapid decline and Plaintiffs’ divestiture proposal would only accelerate that decline, harming publishers who currently rely on open-web display advertising revenue,” the Google filing reads. “As the law makes clear, the last thing a court should do is intervene to reshape an industry that is already in the midst of being reshaped by market forces.”

As you may recall, Google has lost two high-profile antitrust cases against the U.S. government in the past year. The first concerned Google’s monopoly in online search, though the remedies ordered by the judge overseeing that case fell so far short of the abuses Google is guilty of that many believe he was influenced by politics to back off. The second concerns Google’s monopoly in online advertising. And the Google filing noted above comes ahead of remedy hearings scheduled for September 22.

Regarding the “rapid decline” of the web as a publishing platform, Google is, of course, being self-serving here: It wants to maintain control of its monopoly power over online advertising, just as it wishes to maintain control over its monopoly power over online search. The line of defense is familiar, as it’s the same argument that Microsoft (in the late 1990s) and other Big Tech monopolists have made: There’s no reason to regulate an industry that could change at any moment, no matter how bad the abuses or how long it’s been happening.

The issue here is that Google executives said during the company’s most recent earnings report that Search “delivered double-digit revenue growth,” a refutation of the commonly-held belief that AI would destroy web traffic.

But Google has an explanation for that.

“It’s clear that Google [in this filing is] referring to ‘open-web display advertising,’ not the open web as a whole,” Google vice president of global ads Dan Taylor tweeted. “Ad budgets follow where users spend time and marketers see results, increasingly in places like Connected TV, Retail Media, and more.”

That’s not clear to me. And one might argue that a legal filing aimed at preventing a company from being broken up by the government is perhaps the right time and place to be as clear as possible. Regardless, advertising was directly responsible for $71.3 billion of Google/Alphabet’s $96.4 billion in revenues in the most recent quarter. In other words, 65 percent of Google’s revenues come from ads. So it’s no wonder it would like that business to remain structurally unchanged.