Investing.com -- Google (NASDAQ:GOOGL)'s dominance in the $300 billion search advertising market is under pressure as emerging rivals like TikTok and AI startups mount challenges, according to a report by the Wall Street Journal on Monday.
The publication said that while Google has long been the unchallenged leader, new developments in artificial intelligence and social media search capabilities are beginning to erode its lead.
TikTok, the fast-growing short-form video platform, recently introduced a feature allowing brands to target ads based on users' search queries, directly competing with Google's core search business.
Meanwhile, Perplexity, an AI-powered search startup backed by Jeff Bezos, is set to introduce advertisements alongside its AI-generated answers. Perplexity, which already generates revenue from a $20-a-month subscription, could further shift the balance in the search advertising landscape, noted the WSJ.
According to the WSJ, citing research firm eMarketer, Google's U.S. search ad market share is forecast to fall below 50% for the first time in more than a decade by 2024.
They note that competitors like Amazon (NASDAQ:AMZN), which has steadily increased its share, are also chipping away at Google's dominance. Amazon is expected to capture 22.3% of the market this year, up from 17.6% in 2022.
Despite the challenges, Google continues to evolve its search platform, incorporating AI-generated summaries and ads into its mobile searches.
"We're confident in this approach to monetizing our AI-powered experiences," Brendon Kraham, Google's vice president overseeing search ads, told the WSJ.
Nevertheless, they note that advertisers are increasingly looking for alternatives.
The WSJ also quoted digital advertising executive Nii Ahene, who told them that "for the first time in probably 15 years, we will have viable alternatives to Google."
The increasing competition, coupled with Google's ongoing legal battles, paints a complex picture for the future of the search giant's grip on the market.