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Alphabet was headed for its biggest single-day decline in more than two months following a report that Samsung Electronics is considering replacing Google with Microsoft’s Bing as the default search engine on its devices.
Suwon, South Korea-based Samsung, the world’s leading smartphone maker, is considering making the switch, the New York Times reported, estimating that roughly $3 billion in annual revenue for Google may be at risk. Bing’s threat to Google’s search dominance has escalated in recent months with the addition of OpenAI’s technology to provide ChatGPT-like responses to user queries.
Shares of Alphabet fell 4.5% in premarket trading in New York. If the losses hold throughout the day, it will notch the biggest drop since early February. Microsoft was up 1.9%.
Samsung shipped 261 million smartphones in 2022, according to IDC data, all running Google’s Android software. The Korean company has long-established partnerships with both Microsoft and Google, and its devices come preloaded with a library of apps and services from both, such as OneDrive and Google Maps. Negotiations are still ongoing and Samsung may yet decide to keep Google as its default provider, according to the report. Google is working on several projects to update and renew its search services to avoid losing ground. Those include adding artificial intelligence features to its existing offerings, under a project named Magi, which has more than 160 people working on it, the Times reported.
Google is “excited about bringing new AI-powered features to search and will share more details soon,†Lara Levin, a Google spokeswoman, said.