The Munk Debates Podcast - Friday Focus: Google's AI Overview will devastate small and medium-sized businesses

Episode Date: July 11, 2025

The full version of today's special Friday Focus is available to all paying and non-paying subscribers. Rudyard and Janice devote today's entire show to one of the biggest news stories of the year that is not being covered by mainstream outlets: an upcoming change in the Google search engine that will have a devastating effect on everything from business profitability to how we consume news. Google's AI Overview provides AI-generated summaries instead of links to websites, which when tested in Britain resulted in a 50% drop in site traffic. 90% of Canadians use Google as their preferred search engine and smaller and medium sized businesses rely on Google to drive traffic to their websites. Even an optimistic 25% drop in web traffic to these businesses could mean the difference between being in, and out, of business. AI summaries are also going to transform the news industry, relying on one or two big media organizations for sources while shutting out independent and diverse voices. What role can the government play in mitigating the devastating effects this AI mode will have on our culture and economy? And what can businesses do to survive this AI avalanche that is just around the corner? To support the Friday Focus podcast consider becoming a donor to the Munk Debates for as little as $25 annually, or $.50 per episode. Canadian donors receive a charitable tax receipt. Friday Focus provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving the news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue. More information at www.munkdebates.com.  Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

Welcome to Friday Focus for the 11th of July 2025. I'm Roger Griffiths, Chair of the Monk Debates, joined by Janice Gross Stein from Mary Old England tonight coming on to the program in the evening. Janice, great to be in conversation with you. I know you're at an undisclosed location with a bunch of spooks, so we're not going to give it away, but I hope you're locking your door at night.

Do you like tape a piece of hair over your door, like a proper spook to make sure somebody didn't walk into your room between your, I don't know. What do you English have in the morning? Crumpets and boiled eggs? Is that still on the fair? Well, I will tell you where I am, Rudyard, I'm a hail well manner in the Cotswolds in a 400-year-old Manor House, which is where we meet to talk about things. Yes, somewhat undisclosed location. I think we can Google that up. Jen is talking about Google. That's where I want to begin today's show.

We like to cover technology for our audience here on Friday Focus when we see kind of new things that are happening. But let's start with Google and news. You and I have been following stories over the last week or so that are beginning to bubble up that suggests that Google is going to make a big change to its search engine. This is the kind of ubiquitous browser that 90% of Canadians use to originate searches on. Amazing, isn't it? To think of that, 90% market penetration. Google is going all in on AI in their browser. And let's start with those little things called AI summaries that maybe some of our viewers and listeners are used to. And then we can talk about what's coming next.

So let me ask you, do you use those AI summaries that now seem to pop up a lot of the time when you're in the Google browser and especially when you're asking a question? You know, I do, Redyard, because they're so convenient in the sense that they're often a great starting point. But what I do do, and I worry sometimes that many people don't do this, I go and read their notes because I want to know where the source. source is, and I will go and click on the note and read the source to see if the summary I'm getting is fully accurate. And I will say, often it is, but at times it isn't. And I absolutely need to know when it is not. It is career ending for me. If I don't do that work. Well, what's unfortunate, Janice, is that more and more people are not doing what you're doing. What the statistics show, and this is, again, a mind-blowing number is that 60% of all searches now on Google are what's called zero-click, which means nobody clicks through to anyone else.

Add to that data that shows that when the AI summary is presented to the user and not the usual set of site links, the click-through rate to sites drop. by 50% or more, depending on the topic. That is a huge. That is a huge change, Roger. Again, just to walk our listeners through that. In the old days of Google search, a bunch of websites would pop up, right? And even in the last year or so,

I'm sure you've noticed, Roger, that many of the first zero-four are sponsored. So you have to be paid. You have to be paying attention. I skip the sponsored websites and go to the authoritative site, which is the original website. Many people don't do that, and that's a risk as well. But that's the old Google before the summaries. Yeah.

So what's happening now is that websites around the world, especially news sites, it turns out that sites about information versus, let's say, searching for sites that are related to shopping or products seem to be a specific. especially vulnerable in terms of prompting Google to give you the AI summary as opposed to a link. And that kind of makes sense because they're out there scouring the internet, pulling everything off everybody's browsers. Now they're assembling it. And instead of giving you a link to click on, they're showing you an AI summary when your when your search query triggers that summary. And more often than not, if you're searching for a current event or something newsy, you're going to get the summary. You're not going to get a link to the Globe and Mail or to the Toronto Star or to some other news publication. What we're seeing now in reports of the media is that a lot of big news

sites, let's take, maybe not be your favorite site, but it's the eighth largest site in the English-speaking world, the Daily Mail. They have made up until now a huge business out of creating content that's really, really clickable, all those stories about the Royals that you're enjoying over there in England. They see their site traffic dropping by, again, over 50 percent on searching when the user gets faced with that AI summary versus a link to the daily mail. And there are other news websites that are reporting declines as much as 70% in their traffic. And why does this matter, Janice? Because Google sends a heck of a lot of traffic, don't they, to everybody around the world

when they're responsible for 90% of the searches. So roughly 50% or more of most news websites and a whole. lot of news businesses. You can think of all those businesses out there, recipes, I don't know, how to fix your lawnmower. They're all providing information in turn for traffic and then monetizing that traffic when it comes to their website by showing the user ads. That's in a sense how this remarkable explosion of content that all of us find either useful or annoying on the internet has been paid for for the better part of the last few generations. And if 50% or so of your search, is not coming through, then you can do the math. If Google's responsible for 50% of all your

traffic, then your traffic is down 25%, which for many businesses, Janice, could be the difference between being in business and being out of business. So let's stop over that one, right there's many dimensions to the story, but that is an enormous hit for smaller and medium-sized enterprises that rely on Google to drive traffic to their websites. It is the business model that we've been using for 15 years, and what this really tells us is, you're right, there is going to be a 25% drop. That's what the current data show, but wait until people get used to these summaries. It could be higher than that. There will be a, 25% drop in traffic to websites of the smaller and medium-sized enterprises.

And that could mean the difference between being, as you just said, rather than being in and out of business. And we should tell all our Canadian listeners hasn't come to Canada yet. So if you're wondering why haven't I seen that on my Google page, because it's being tested right now. But it is coming. And I think it's transformative. them in some good ways and some bad ways, which we'll talk about.

Yeah. So what you're talking about is something called AI mode. So this is the next generation of these summaries. So instead of getting the summary and then the links below and the annoying stuff at the side of your Google browser where you can see more stuff that you might want to click on, most of it is ads, you're now going to get something that's being tested in the United States in India and that will all seems. all indications that Google is going to roll this out globally as first maybe an option on their

browser and then maybe the default for their browser. And I've gone on because I have a VPN and this is a cool little thing that lets me pretend that I'm in the United States and not in Canada. So I was able to play around with this. And I'll tell you what I saw. I saw basically chat GPT. So those are you familiar with chat bots, it's like a little, you know, field where you put your search query in or your conversation with the chat. chat bot and then you start kind of talking away and it starts giving you information. So it's like a chat GPT chatbot with real time, almost real time Google search embedded into it. There are no links, Janice. There are, there's none of that, you know, hyperlink, site link out anywhere.

There are these microscopic, my 54-year-old eyes can barely see them, these microscopic paper clips that connote a source. And there are testing that's gone on, you know, by news organizations, one example of, again, the types of businesses that the internet has enabled, you know, selling information by aggregating views and selling advertising against those views, that when, you know, Google AI mode is on, forget the AI summaries. We're talking about a whole new browser experience built around AI. the traffic goes down not from 25%, it goes down to 50%. So one news outlet is characterizing this as an apocalypse, an apocalypse of the internet.

What do you think about it? And what do you think Google's responsibilities are? Because it's a remarkable situation for us to have gotten ourselves into where one company is responsible for 90% of the search in Canada. And now they're going to make this pretty big change, Janice. to how we experience search and what the effects of search are on the broader economy. Look, I'm really concerned, Roger. You know, let me first say from an individual perspective,

if I can't access the sites, if they're tiny little paper clips off to the side, and I can't access the sources, I can't use it, frankly. So there's a fundamental issue of verification, which, All of us want to know. So it's a critical piece of a search engine to me that I'm able to access the sources. Other than that, we are relying on an AI tool to scrape information off the web and write an accurate summary. Well, we know their varying levels of accuracy with different AI tools, so we are making a huge bet here. Now, from what I understand, and Rudyard, if I don't have this right, correct the record,

Google is going to go to sources, which, you know, its search engine is instructed to go to sources, which are authenticated, which are high reliability, because it's going to be going to many fewer sources. So here's the good news piece. We have all been struggling with disinformation on our democratic politics. And many people consider it the biggest, I don't, but many people consider it the biggest challenge to democracy. Well, if in fact Google is only going to go to sites, which themselves fact check and provide more reliable information, we may, with one swoop solve one of the biggest problems that we faced. The dark side is that there will be incredible concentration of media power.

Fuddled all through one company, as you just said, but behind that one company, we're going to have a much, much smaller pool of sources, independent, smaller voices, which are going to be more diverse, more community-based, are going to be shut out. this and it's going to be very, very difficult for those kinds of new sources to survive. Does that spill over to the broader market? It's very effective. Who knows? So there's an enormous risk of concentration of power here.

The big get bigger. That's what will happen. No, you're absolutely right. And some of the, again, people are starting to test this in the United States first. I think it rolled out this weekend in India as a beta version. this is Google AI mode. I think Google will bring it at some point to Canada to test it and then likely roll it out. It showed in the U.S. test that it overwhelmingly used what you might characterize, at least in American parlance, center-left sources like the New York Times, the Washington Post, CNN, and the BBC.

And they were overwhelmingly, if you were going to click on those microscopic paper clips, those were the places where the source. scraping and the summary was created from. Now, I think there's, you know, there's two problems with this jazz, one that, I mean, God bless the New York Times and the Washington Post, but, you know, the sun doesn't rise and set on the editorial rooms of those two papers. There are a range of views as there should be, a range of views about issues in front of us, political, societal, and otherwise. So it's, it's kind of like a concentration of outlook into this. somewhat conventional framework of these legacy media outlets. And then I think maybe more worrying, Janice, is who, what prompts does the AI have when it skims and scans those sites and

whatever it chooses to add? It creates, in a sense, the opportunity and maybe the reality that Google now becomes the distribution channel for news in our society. They will make the determination about what sources are being scraped. And then how the AI, like when you use chat GPT, what they're asking the AI to do when it pulls the information over. Because there are all kinds of decisions that it's making inside its large language model about, you know, not simply where it's reading, but how it's reading it and then what it's reporting back to you.

I don't know, Janice, this strikes me as kind of dystopian. And I guess I ask you, why did we ever allow ourselves to get into a situation where one company controlled 90% of a pretty, like, important behavior in our society, which is searching for digital information on the internet. We never would have allowed ESO, say, to control 90% of the restaurants or Tim Hortons to control 90% of, sorry, gas stations for SO, restaurants for Tim Hortons. And yet here we have one company that's now going to make these really significant changes to this thing that we're all using 90% of us in Canada. And it's going to upend businesses, up in the entire information

ecosystem in our society. And we just seem to be going ahead with this, Janice, with little or no discussion or debate. Yeah, it is an enormous issue. And look, Rudyard, let's distinguish two separate issues. One, I think there will be a lot of relief if these search engines go to sources where there is serious fact-checking because we have had, frankly, garbage in our search engines. But, Jessica, I just stopped you there for a sec. I mean, I agree with you, but Google's not going to send any traffic to those places anymore.

Their traffic's going to fall by 50% like everybody else. So who's going to pay even for the Great and August Washington Post and New York Times to do all this lovely fact-checking and verified information? Is government going to pay for it? Is Google going to pay for it? Those don't strike me as very attractive. solutions in what should be a free and independent press in any democratic society. That's the underlying question. What's Google's business model here, Richard, when it does this, right? Because Google's business model fundamentally was to monetize the personal data that you

and I shared with Google. Some of you may notice that occasionally websites will say to you, well, you know, what are your preferences with respect to cookies? And I always go to the trouble. I want to reject all the optional cookies. But again, that takes extra time. Many people are just in a hurry and they just say accept all. And that's the business model for Google, that they, in fact, get paid for the traffic they push to millions of websites.

If they're not going to do that anymore, what's their business model? Yeah. It's really hard to figure it out when you look at these dynamics. They're just going to go to these websites, but these websites are not going to have traffic driven to them by Google. Well, why would they then pay Google, even if you're in the New York Times. Why would they? Well, here's what right now is so sinister in a way is that Google has said to all, everybody, if you want to be not included in our AI, you know, scraping and synthesizing,

then we're not going to include you anywhere on any part of our browser, on any link. You will disappear, basically, for the 90% of the population that experiences the Internet through Google's browsers. So I don't know, Jess. I think there's going to have to be some kind of intervention here. I'm not a big fan of intervention, but when you've allowed one company to assume these types of monopoly powers, and we seem to have just done this, I don't know, out of indifference or ignorance, and then we have a major change like this. And I think the reason Google is doing it to answer your question, even undermining a big part of their business model,

is that ChatGPT just announced this week that they are launching their own browser. And I think what Google understands is that they're, their monopoly position is over and that they now have powerful competitors potentially in chat GPT, perplexity, meta, and others which are rushing forward with these like chat bots and then AI agents that will increasingly, whether we like it or not, maybe take over different parts of our lives and Google has to be there. Search is being replaced by synthesis and by, in a sense, the analysis, good, bad or ugly. that AI provides you.

As somebody who checks every source of everything I ever read and balances sources and nightmare, frankly, Roger, for anybody like me. But beyond that, I think there's a bigger issue which uses put on the table,

regulation. Let's call us pay to spade here. Our prime minister just pulled the Canada Digital Services tax, right? Because it was such an issue with the Trump administration. you're taxing our biggest companies, and we just pulled right back.

We were out in front of the plaque here, and we pulled back. Canada is not going to do any regulation on this one. It just can't, it can't give them. So it allows all these news businesses that it's propped up through state funding for the last half decade or more to the tune of hundreds of millions of taxpayers' dollars

just to go out of business. It allows potentially thousands, maybe tens of thousands of internet businesses that are not news, but are still based on the older Google ecosystem of, you know, you create something of value, people search it out, Google sends you traffic,

you monetize that traffic. We just let that all go up in a giant, you know, ball of fire to light the way, you know, for Google to roll out AI mode and, and change its browser forever. Yeah.

Well, that's exactly what, at stake. So the only other solution is that the United States regulates this. Now, where's that going to happen? Yeah, not likely. Yeah. First of all, the United States is, in fact, under Trump, under the Trump administration, is backing down on much of the regulation. So where is this likely to happen? It's likely to happen on antitrust grants, right? And competition. And for exactly the reason that you've said, and there's some history here that suggests that's not impossible, although it's likely, that there will be anti-trust legislation against Google. That was the only thing. If the Europeans do it, Trump will lash back at them in exactly the same way, and they pull back

too. So the only way this can be regulated is the Trump administration does it? How much hope are you holding up for that? Trump really loves mainstream media, according to all of his press conferences. He's going to say Google, bring it on, burn it all down. I just want, you know, grok or something like Elon Musk's chatbot, which had a few really bizarre kind of Nazi-esque meltdowns this week. I mean, this has been a wild week for AI, and it's partly why we wanted to talk with our audience today about it on the show. Chat GPT coming on with its own browser, GROC.

people can check that out. Google it while you still can. And then AI mode, you know, coming down the pipe. Jazz, we are. We'll have to revisit this story, Rudyard, because I think you like I are mystified by the business model. I understand why Google is doing it because there's competition from chat GPT and other AI.

There's co-pilots, a whole bunch of them. But they have to have a viable business model. Yeah. And I can't figure out what it is. We'll have to see as this story rolls out. But it's probably a single most important story of the year, I would say, for the future of our democracies. Yeah. And it just makes you feel, Janice, like we're, look, I don't think AI is as big as the Industrial Revolution.

I think probably the better analogy is the arrival of the Internet. But we went through the arrival of the Internet. over like, we eased into it over a good decade or more. If you go back to the original internet in DARPA and in universities like yours, it was something that, yeah, it snowballed into something really big and eventually into the dot-com bubble that, you know, exploded in the 90s. But there was a good decade there of the internet oozing out of, really out of government and academia. This time around, we have a big technological change and it's exploding out of some of the richest and most powerful companies in the world that are in an arms race with each other to

deploy this technology faster than any of their competitors. Does that worry you that we're going about something in an environment that's really different than any other kind of rollout of a new technology in your or my lifetimes? Yeah, that's absolutely accurate. And that's because the pace of technological change is picked up. It is so accelerated, Roger. We talk about that all the time that it's abstract, but when you see a story like this, it is so real.

And as you say, even legacy media are going to take a big hit to their revenue from this. But so Google, I don't think this is completely thought through in any way. And of course, what the game changer is is that we have an administration in the United States. that is so ill-disposed toward regulation, which is the first place we've been looked for for help here.

Yeah. Well, Janice, we ran out the clock on this topic because it was so... Big one. It was a big one. It kind of sleeper, but I think people are going to read more about it. We'll stick a story in the show notes. I wrote something on it this week for the Hub. We'll put that into the show notes for our entire community

and make this episode available to all the bunk members, paid and unpaid. But if you are not a subscriber, please join all the great subscribers that will also be listed in today's show notes, the dozens of people that have come on to support civil substantive informed discussion and debate about these types of big issues, some of which are out in the open and others that we like to keep an eye on with Janice's help that are kind of percolating. Deep Seek was another one we did earlier this year too, Janice.

And I think we kind of got ahead of the curve a bit on that. And I think we're getting ahead of the curve with our audience on this topic too. So thank you for, yeah, for coming. As a fan hub and a regular reader, I'm going to continue to go to the Hub website and click. Thank you. And I think that's what it's going to come down to. The onus is going to be on citizens to make the effort. But it's going to be harder.

There's no question. Yeah. This is an era of just rapid change where the agents of change are these very powerful, increasingly, well, unregulated and increasingly politically enormous forces that are, Google, meta, chat GPT, and others that are reworking, not just technology, but society, politics, and so much more. We'll continue to watch it, and carefully for you here on Friday Focus, and thank you all for tuning in and listening. If you're on our YouTube channel, if you enjoyed this, please subscribe, click on the notification bell. You've got our next Friday

Focus video sent to you as soon as it's published. And if you're over on our podcast feed, Thank you for listening. We'd love your reviews. Jump into the review section of your favorite audio app. We read all the reviews carefully, and they're really helpful. So please send us a review. Janice is late in the UK, so I'm going to let you go and enjoy your crumpets. I really do like crumpets.

I haven't had one in a while. Did you have one this morning? Did you have any clawed? When I had this afternoon for tea with clotted cream and strawberries, and boy, it's not every good. Wow. Wow. I'm jealous. Okay, bring me home some crumpets and we'll toast them up on next edition's Friday Focus. See you next week. Bye-bye.

Thank you for listening to this edition of the Friday Focus podcast. I'm Rudyard Griffiths, the chair of the monk debates. I was joined on this program as I am each week by Janice Gross Stein, the founding director of the Monk School of Global Affairs. Janice and I would love your reactions to what you heard on the program today. Also, your situation. and ideas about future topics that we should cover on Friday Focus. Please send us your suggestions now to podcast at monkdebates.com. That's MUNK Debateswithan S.com. This podcast is produced by Aidan Moscovic and generously underwritten by the Peter and Melanie Monk Charitable Foundation.

Please visit our website, www.com, to access hundreds of podcasts, dialogues and debates on all the big issues and ideas shaping our world. Again, you can do that right now at triple-w monkdebates.com. While you're there, consider if you're not already becoming a free monk debates member. You get all kinds of great benefits and perks as a complimentary monk member. You can grab yours right now at triple w monkdebates.com forward slash membership. Thanks for listening to this program. We'll do it all again soon. Bye-bye. Thank you.