Microsoft unveils plans to generate AI search revenue

Yahoo Finance’s Dan Howley joins the Live show to discuss Microsoft’s plans to generate revenue from AI search.

Video transcript

- Microsoft is now looking to generate revenue from its AI-powered Bing search service with advertising. But just how much of an opportunity exist in the AI ad market? Yahoo Finance's Dan Howley has the details. We know we've been looking at this ad space. So this is an interesting move.

DAN HOWLEY: Yeah, it really is. And I just want to point out real quick, when it comes to Microsoft and the opportunity that it has for gaining market share and revenue when Microsoft's CFO, Amy Hood, had been part of the announcement where Bing was debuted using the ChatGPT OpenAI technology, she had said that one point of search advertising market share is worth about $2 billion in annual revenue. So, look, they are trying to pull that revenue away. And how they're going to do that is by adding advertisements.

Now, this is coming to Microsoft's chat version of Bing, so when you go into the actual chat box, not when you're doing standard search on Bing, although getting everybody on to Bing in the first place is probably a good way to start. Bing, when you do chat, will eventually be providing you ads. And so there's been a large discussion about what that means, especially for the publishers who their content is being used to inform Bing.

And so part of that, Microsoft says, is part of its Microsoft Start Publishers Program. And so essentially what they're they're calling for is a revenue split with publishers when their content is used in a chat response from Bing. There's hover-over links that they're thinking of doing, where you'll hover over a particular citation. It'll open up a larger link window that you can look at.

But this is something that I think a lot of publishers have been concerned about. One of my former editors at Tom's Hardware, a enthusiast site, has been regularly pounding away at this, saying, look, Bing, ChatGPT, Bard, they're all going to be using the work of journalists and basically taking it for themselves. People won't need to go to websites to get that kind of content that they would normally need because it'll just be presented to them in a chat box.

So Microsoft seems to be erring on the side of caution here, not trying to bother or annoy publishers and trying to say, look, we'll advertise, but maybe we'll split that revenue with you or we're hoping to split that revenue with you because, look, you can't power Bing and the chat AI without content from publishers. So we're just going to have to see how this shakes out. If it eventually becomes or comes to the point where you can ask Bing a question and you don't have to go to a website, then why would you click a link to go to that website if the answer is just presented to you right there? I think this is going to be an interesting problem that the industry, tech and publishing, are going to have to figure out.

- And that's interesting. It's sort of cannibalizing it. As you mentioned there, why would you have to go to the website? You already have the information there. Interesting stuff. Yahoo Finance Tech Editor Dan Howley, thank you so much.