The future of search: AI-driven disruption and diversification

The rise of generative AI signals a paradigm shift for the search industry 

In 2025, the worldwide search market is poised for transformation, driven by: 

1. The rise of generative AI, which has introduced disruptive tools and formats. 
2. Evolving consumer behavior, which shifts how people discover information online. 
3. New challengers, which are gaining traction and threatening Google's long-standing dominance. 

While it’s still early days, the potential impacts on the search advertising landscape, search engine optimization (SEO) strategies, and the overall search experience are significant. 

Google’s decades-long dominance

Google has dominated search for over two-plus decades, claiming more than 90% of traditional search queries and processing two trillion searches annually. 

However, the landscape is changing, and Google is now facing pressure from emerging challengers such as OpenAI, Perplexity, Amazon, and TikTok, in addition to fierce regulatory forces. 

As of 2024, Google commands 57% of the $300 billion global search advertising market. However, this share is projected to decline as emerging search platforms gain traction in 2025 and 2026, signaling a new era of competition in the search industry.

Generative AI is at the center of search disruption

Generative AI democratizes search innovation, enabling new players to enter the market and reshape the user experience. While traditional leaders like Google and Bing are integrating generative AI into their platforms, they face increased competition from AI-native challengers— such as Perplexity, OpenAI, and Anthropic—that are moving fast to innovate in this space. Users can even set ChatGPT’s search extension as the default search engine on all Chromium based browsers, including Chrome, Edge, Brave, Opera, and more. Apple has also entered into a partnership with OpenAI to integrate ChatGPT into its iOS operating system. 

At the same time, the emergence of open-sourced AI models is lowering the barriers to entry for social and retail platforms to develop advanced search tools. The result is a proliferation of options for finding information online, which is causing disruption in the search landscape. 

As users diversify their search habits— utilizing different platforms for shopping, recommendations, and information gathering— Google will face incremental competition. However, Google will remain the leading search provider and continue to grow its ad revenues in absolute dollars, expanding at an 8% CAGR over the next two years.

A diversifying search landscape

Social media platforms such as Instagram and TikTok have emerged as primary sources for real-time news, product recommendations, and community-driven content. In the age of AI, platforms like Meta, TikTok, and Snapchat are enhancing their in-app search features using generative AI to compete more directly with search giants. This strategic move aims to boost in-app search engagement and strengthen competitive positioning in the evolving search landscape. 

Meanwhile, retail giants like Amazon, Walmart, Target, and Etsy are transforming the online shopping experience through the use of generative AI search tools. By leveraging proprietary data and open-sourced LLMs, these companies are developing engaging, natural language search experiences that are tailored to their specific product ecosystems. For instance, Amazon has introduced Rufus, a generative AI shopping assistant that combines insights from its product catalog, customer reviews, community Q&As, and information sourced from the web. This innovation improves product discovery, enabling smarter and more intuitive searches directly on the retailers’ platforms.

Looking ahead to 2025, Amazon and TikTok are best positioned to gain share of product search advertising revenue from Google. Both platforms are making strides by integrating advanced search capabilities as well as shoppable content and live shopping experiences—key trends shaping the evolution of search behaviors. 

Emerging disruptive tools and formats

As the search landscape evolves, innovative tools and formats are beginning to arise. AI-powered chatbots like Google’s Gemini, Microsoft’s Copilot, ChatGPT, and Perplexity unlock a new era of possibilities for how consumers can search online. 

Large language models (LLMs) are transforming traditional search by moving beyond keyword based algorithms to conversational AI. These AI powered search engines interpret natural language, understand context, and respond to complex queries with greater relevancy. 

Unlike traditional search engines that generate a static list of links, AI-driven features—such as Google's AI Overviews—provide personalized, concise answers summarized at the top of search results. This change influences search behavior, as users may find information directly within summaries without scrolling down the results page or clicking on links, ultimately reducing direct traffic to websites. According to initial research, click-through rates for paid ads drop significantly when AI Overviews appear in search results (from 21% CTR with no AI Overviews to 10% CTR with AI Overviews). 

In 2024, it is estimated that Google’s AI Overviews will handle close to 60 billion search queries. While this is only 3% of its two trillion annual search queries, it’s likely to increase rapidly over the next few years. In comparison, Perplexity processes approximately 100 million queries per week, translating to more than five billion annually. This represents nearly 9% of Google’s 60 billion AI-driven queries. 

The adoption of generative AI tools is projected to grow by 20% year-over-year in 2025, reaching 379 million users globally. This will directly correlate with an increase in AI search queries. 

Impact on search advertising and SEO

To boost its growth, Google is experimenting with embedding ads directly in AI-generated search summaries. These native ads provide contextually relevant product and brand recommendations based on user queries. According to New Street Research, AI Overviews advertising is poised to account for a growing share of Google's search advertising revenues, generating 1% in 2025, 3% in 2026, and 6-7% in 2027.

We won't speculate on the outcome of the U.S. Department of Justice’s decision regarding Google; however, the success of AI Overviews depends on various uncertain factors. This includes its ability to compete against emerging competitors that are experimenting with innovative monetization models and advertising formats. 

Perplexity is notable amongst these competitors, and recently introduced “sponsored” follow-up questions and paid media positioned alongside AI-generated answers. This new format has gained initial interest from major advertisers like PMG, Indeed, and Whole Foods.

Additionally, Perplexity is adopting a revenue-share model with its publishing partners for sponsored follow-up questions, including Fortune, Time, Entrepreneur, and WordPress. This innovative approach to monetization allocates a flat percentage of advertising revenue to publishing partners on a per-article basis. This means that each time a “sponsored” answer cites content from one of its partners, those publishers receive a share of the revenue.

Multimodal search 

The future of search is increasingly multimodal, seamlessly combining voice, visual, and text-based queries to create more intuitive interactions between humans and technology. 

Voice assistants are evolving with the integration of generative AI features. For instance, Apple is updating Siri to include ChatGPT, which enhances conversational search capabilities and improves accessibility to LLMs on devices. These rapid advancements will lead to greater user reliance on voice-enabled search as users demand more “hands-free” and natural exchanges.

Additionally, LLM features enhance visual search tools like Google Lens and Pinterest Lens. These improvements increase the accuracy of image-based queries and enable users to quickly identify products, objects, and other visual content. 

The rise of multimodal search is introducing innovative advertising formats like dynamic visual ads that combine images, videos, and text to match user queries with relevant and engaging sponsored content.

The emergence of AI-powered search and innovative AI ad formats necessitates a shift in SEO strategies. In 2025, marketers will move to focus on optimizing content for AI generated summaries and voice and visual search.

Traditional SEO tactics like keyword optimization, backlinks, and site speed are evolving to focus on optimizing content for LLMs and multimodal search. This shift emphasizes the importance of natural language processing and contextual relevance, making conversational tones and long-tail keywords critical for inclusion in AI-generated summaries. 

At the same time, the deeper indexing of visual content underscores the need to optimize metadata—such as alt text, file names, and captions—to ensure seamless alignment with both visual and text-based search queries.

Our predictions for the search market in 2025

The transition to AI-powered search is still in its early stages. Users are unlikely to abandon traditional search methods entirely over the next few years, as they are valued for their simplicity, reliability, and effectiveness—not to mention, these habits have become engrained behaviors over decades. However, traditional search will be increasingly supplemented by AI chatbots and other innovative tools. With time, we will see habits shift as consumers adjust to the quality of search results via new platforms. 

As the volume of AI-powered search queries increases and user adoption grows, search behaviors will change. In response, advertisers will cautiously and gradually experiment with AI ad formats, testing and refining their strategies as the landscape continues to evolve. 

As a former Baidu chief product manager of search and corporate VP noted about the future of search: “People won’t come to search just for a query or a list of links—they’ll come to complete tasks. By combining different tools, agents can do much more than search alone.”

In 2025, we predict that:

1. Google's share (percentage) of the search advertising market will continue to shrink, decreasing by low single digits (from 57% in 2024 to 55% globally and from 51% to 48% in the U.S.). This market shift is due to consumers increasingly adopting a multi-platform approach to search. 
2. Amazon and TikTok will capture more share of product search advertising revenue, driven by their integration of shoppable content and live shopping experiences which appeal to Gen Z. 
3. OpenAI and Perplexity will gain a larger share of AI-powered search queries in 2025, even though they will not surpass Google's volume. 
4. Marketers will shift SEO strategies to focus on optimizing content for AI-generated summaries and voice and visual search.