In the dot-com bubble you had dozens of companies selling everything from palm pilots to online groceries to digital currencies (pre-Bitcoin, thanks to Whoopi Goldberg). Advertising wasn’t nearly as prevalent as it is today. Jeff Bezos even famously said “ads are the price you pay for an unremarkable product or service."
To be clear, advertising isn’t new. But as the consumer internet really took off in the early 2000s, with Google, Facebook, Reddit, Twitter, and all your favorites, advertising became THE de facto method of monetization.
Since the dominance of ad-driven models over the last decade or so, you’ve seen a number of companies get built around the idea of breaking out of it, and bringing “freedom to the internet.” Skiff wanted to free us from Gmail. Neeva wanted to free us from Google Search. Both were less than successful, and ultimately acquired.
Today, people have been touting AI chat tools, like Perplexity as the “first legitimate threat to Google’s search supremacy.” Perplexity made its stance known right on its website, that search should be “free from the influence of advertising-driven models.” A line that, just within the last month, was removed from Perplexity’s site.
I’m sure it’s just a coincidence, but right after that line was removed from the site, Perplexity shared that the company would start selling ads. Perplexity’s Chief Business Officer, Dmitry Shevelenko, even said, “advertising was always part of how we’re going to build a great business.”
The unavoidable weight of gravity that is advertising revenue has once again proved too much to resist. Even Amazon, again famously, once it started building its advertising business, grew that business unit to $46 billion in 2023 revenue. And Perplexity isn’t the only one jumping on the band wagon.
Discord, whose CEO had consistently said for years that ads would be too intrusive on the platform, has now announced plans to start selling ads. Even Apple is upping its game. Apple already has a sizable ads business, not to mention its massive $18 billion deal to keep Google the default search engine on Safari, which is basically one big Google ad. But now, Apple is doubling down. The company recently announced plans to offer an ad network across its network of devices.
As companies like Perplexity live up to the AI hype, or Discord looks at a future IPO, or Apple confronts the reality of stagnating smart phone sales, everyone is looking for that silver bullet. And for all of them, advertising is likely to continue to be the answer.
