Can Google Adapt Like Amazon Or Will It Face eBay's Fate? Gene Munster Says ChatGPT 'Overhang' Isn't Going Away, Shares Candid Take On The Path Forward

Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google is at a critical juncture in its evolution, with industry experts like Gene Munster questioning whether the tech giant can adapt to the AI-driven future or risk being left behind like eBay Inc. (NASDAQ:EBAY).

What Happened: During Alphabet's first-quarter 2025 earnings call on Thursday, Philipp Schindler, Google's chief business officer, highlighted the growing adoption of AI overviews, a feature that summarizes search results using AI. 

"We've continued our efforts to help more people ask entirely new questions, bringing more opportunities for businesses to connect with consumers," Schindler said, adding that the feature is now available in over 15 languages across 40 nations.

He also noted that AI overviews are now being used by more than 1.5 billion users worldwide.

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However, the rollout of this feature has not led to significant improvements in monetization. Schindler said that AI overviews continue to generate revenue at the same rate as before.

“On the ads in AI Overviews, late last year actually, we launched them within the AI Overviews on mobile in the U.S, and this builds on our previous rollout of ads above and below,” he said. Adding, “AI overviews overall, we see the monetization at approximately the same rate, which gives us a strong base on which we can innovate even more.”

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Why It’s Important: Gene Munster, managing partner at Deepwater Asset Management, took a more critical stance. He said that AI overviews might help keep the business stable in the short term, but long-term growth depends on how Google adapts its search results page.

Google’s current search results—featuring a mix of AI overviews, blue links, and organic links—might not be enough to compete with newer, more streamlined search models like Elon Musk's Grok, OpenAI's ChatGPT, or Anthropic's AI model Claude, Munster noted.

Munster then cited Doug Clinton, managing partner at Deepwater, who compared Google's situation to eBay's struggles in adapting to a more competitive environment.

"The fork in the road" for Google is how it handles its search results page, Munster explained, adding that if it doesn't evolve like Amazon.com, Inc. (NASDAQ:AMZN) did in e-commerce, Google might face a future similar to eBay’s.

Alphabet reported first-quarter revenue of $90.23 billion, marking a 12% increase from the previous year. This figure surpassed the Street consensus estimate of $89.2 billion. Google Search generated $50.7 billion, up from $46.2 billion.

Price Action: In after-hours trading, Alphabet Inc. Class A shares rose by 4.82%, reaching $166.95, while Class C shares increased by 4.63%, hitting $168.95, according to Benzinga Pro data.

According to Benzinga Edge Stock Rankings, Alphabet currently holds a growth score of 64.49%. Click here to see how it stacks up against other companies in the sector.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.