Driving the news: Google's stronghold on the $300 billion search advertising market is weakening, as competitors like TikTok, Amazon, and AI-driven platforms gain traction, the Wall Street Journal reports.

• Google's market share in U.S. search advertising is projected to fall below 50% next year for the first time since 2008, a significant drop from its previous dominance, according to eMarketer.

• TikTok is now allowing brands to target ads based on users' search queries, directly challenging Google's core business. TikTok's global daily search volume exceeds three billion, and its ad revenue is expected to rise more than 38% this year.

• Another significant player is Perplexity, an AI-powered search startup backed by Jeff Bezos, which plans to introduce ads beneath its AI-generated answers later this month, aiming to tap into Google's market, WSJ reports.

Why it matters: The erosion of Google's dominance in the ad market signals a pivotal shift in digital advertising, where AI-driven platforms and social media are reshaping the competitive landscape. As rivals like TikTok, Amazon, and Perplexity capitalize on AI and emerging search behaviors, advertisers are exploring alternatives that could disrupt long-standing Google ad strategies. For businesses, this means more options to reach consumers, but it also introduces new complexities in navigating a fragmented ad market.

Pressure from Big Tech: The search ad market is facing unprecedented pressure as Amazon and Microsoft are directly challenging Google's dominance by redefining how search results and ads are presented.

• Amazon, traditionally a leader in product searches, is rapidly growing its share of the U.S. search ad market, projected to reach 22.3% this year, outpacing Google’s growth, WSJ reports.

• Microsoft’s Bing is also stepping up the competition by integrating sponsored links and comparison-shopping ads into its AI-powered chatbot.

• In response, Google rolled out a set of AI-powered features, including AI Overviews and advanced planning tools powered by its new Gemini model. These features allow users to ask more complex questions and receive quick, contextual answers.

'Throw Google off its throne': While competition in the search ad market is heating up, some experts caution that Google's dominance won't be easily disrupted. Andrii Andrieiev, Director of Engineering at Graylog, a developer threat detection and incident response solutions, highlighted the challenges facing emerging players like Perplexity and the continued strength of Google. “The biggest hindrance for Perplexity to replace Google on Apple devices is the lack of the default Safari search engine support,” Andrieiev said. “Going to the site or opening a dedicated app will always be one extra step.” Meanwhile, Google’s Search Labs, which includes AI summaries along with "People also ask" and "People also search for" sections, offers a more versatile search experience. “This made my usage of Perplexity fade away in the recent months,” he said. Simply adding generative AI is "insufficient to throw Google off its throne."

Added tension: The growing competition comes as Google faces legal challenges over its search dominance. This summer, the company lost an antitrust case that ruled Google had illegally maintained its monopoly in the U.S. search-engine market, according to WSJ. Google plans to appeal the ruling, but the case adds further strain at a time when its market share is already under pressure.

Bottom line: As AI reshapes the search ad market, Google’s dominance is increasingly vulnerable. Competitors like TikTok, Amazon, and Perplexity are gaining ground, and advertisers are embracing new alternatives. The coming years will be crucial for Google as it fights to maintain its leadership amid growing legal and competitive threats.