[THE VIEW] The Economics of Search Turned Upside Down by AI

The End of the Click Economy...
Restructuring the Content Value Chain
Upheaval in the $200 Billion Search Advertising Market
The Future of Search Replaced by AI Responses

Search has long functioned as a core structure in the information environment. Users composed questions in text form and input them, while algorithms sorted through lists of links to select necessary pieces and construct meaning. This process was not simply about 'retrieving' information but was closer to a cognitive task of contextualizing and interpreting fragmented data. However, generative AI is fundamentally transforming this structure. Search, which centered on 'exploring' information, is now being reconfigured into a method where AI directly 'delivers' refined answers. Questions still exist, but the process of finding solutions is gradually disappearing.

Now, users obtain responses to their questions from a single interface without having to go through numerous links. AI search services being prepared by OpenAI and services like Perplexity AI are rapidly growing in this direction, making information retrieval feel like a real-time conversation. Users no longer need to dive into the sea of information; it is sufficient to consume the 'interpreted information' that AI has brought forth. This change is not merely an improvement in user experience but a transformation that shifts search from exploration to conversation, altering the very way we trust and interpret information.

As AI takes on the role of 'organizing and presenting' information, traditional search platforms face structural pressures. The moment summarized answers directly respond to users' questions, the need to click links decreases, reducing opportunities for advertising or content consumption. This is a critical change for the search advertising industry, which generates over $200 billion annually through pay-per-click (PPC) models. In fact, major search engines are internally concerned about traffic declines of 10-15% following the exposure of AI-generated answers. Without adopting generative AI features, they risk losing users; adopting them shakes their revenue structures.

Therefore, recently, major search platforms have adopted a compromise strategy that mixes AI responses and advertising content on a single screen, but this essentially reveals a conflict between two systems (summarized automated answers and commercial click inducement). This dual structure disrupts the balance between short-term advertising revenue and long-term user experience, creating a fundamental contradiction in the business models of search platforms.

This change also structurally impacts information producers, especially content-based creators. The more search platforms provide summarized answers through generative AI, the less direct traffic flows to original content. Users can now obtain key information without clicking on articles or visiting blogs.

This means AI platforms become the main consumption route for content while not providing meaningful compensation to the content creators. Content is used as training and response material for AI, but the connection with producers is severed in the process. The value chain of information industry?content production, distribution, and consumption?is broken, blocking creators’ monetization paths in the digital content economy, and the creative ecosystem mediated by search is gradually losing its place.

A more fundamental issue is the concentration of interpretive power over information. Traditional search allowed users to encounter diverse perspectives and provided opportunities for direct judgment. Although an imperfect system, users developed the ability to judge and compare on their own within that imperfection.

However, AI-based search centers on a single answer. When users shift from being 'seekers' to 'receivers,' judgment over information is preempted and summarized by the platform’s algorithms. Especially, biases in the data AI models are trained on, the opacity of response generation methods, and implicit value judgments embedded in answers operate in a structure that users find difficult to critically detect.

While information appears to be provided neutrally, in reality, certain perspectives are being reinforced. In this respect, this new search system is not merely an efficient tool but could become a means of reorganizing social power.

Talking about the future of search is not just about examining technological evolution. It touches on deeper questions about how we receive, interpret, and trust information.

AI-based search now delegates part of judgment to technology itself, and this trend is becoming increasingly natural in daily life. As important as the accuracy of information is the ability to perceive the framework within which that information is constructed and presented. This is the new form of literacy that allows us to view search?a routine tool in the AI era?more critically.

Yunseok Son, Professor at University of Notre Dame, USA