Local Memo: First Major Lawsuit Against Google’s AI Overviews, More Search Engine News

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Summary

In this week’s update, we look at four different stories, all involving search giant Google. From the impact AI Overviews have on the sites they cite, both positive and negative, to Google’s continuing quest to improve reviews and elicit more helpful information about businesses from users.

Google Sued by Chegg Over AI Overviews Hurting Traffic and Revenue

The News Chegg, an education technology company known for its homework help and study resources, has filed a lawsuit against Google, claiming that the search giant’s AI Overviews feature has harmed its business. Google’s AI-generated summaries provide direct answers to user queries by pulling content from third-party sites, which might be convenient for user experience, but Chegg claims utilizing its content in this forum is negatively impacting its traffic. They argue AI Overviews significantly reduce click-through rates to their website, resulting in a notable drop in both traffic and revenue. Chegg asserts that the situation has become severe enough to force workforce reductions and overall business decline.

The lawsuit centers on allegations of unfair competition and unjust content practices. Chegg claims that Google is benefiting from Chegg’s intellectual property without proper compensation, essentially using Chegg’s content to keep users within the search engine environment rather than directing them to the source site. The company contends that this practice not only undermines their business model but also disrupts the broader digital ecosystem, where content creators rely on web traffic for ad revenue and customer acquisition.

In response, Google has dismissed Chegg’s claims, stating that its AI Overviews are designed to enhance user experience by offering quick, accurate answers. Google further argues that the feature does not harm websites but rather diversifies the traffic flow across a wider range of platforms. The search engine giant maintains that its practices comply with fair use and copyright standards, labeling the lawsuit as without merit. As the legal battle unfolds, it raises broader concerns about how AI-generated content impacts publishers, platforms, and the balance of power in the digital economy.

What It Means This is the first widely publicized lawsuit against Google’s AI Overviews feature. Depending on how it plays out, the suit may significantly impact businesses who rely on traffic from Google, and the guidelines by which Google is allowed to source content and showcase citations.

Effects of Not Appearing in AI Overviews

The News In an interesting contrast to Chegg’s claims of reduced traffic due to Google’s AI Overviews, a recent study by Terakeet found that for sites cited in these AI summaries, traffic significantly increased, while being left out led to significant declines. In fact, Terakeet’s research shows that webpages featured in AI Overviews experience increased clicks, regardless of their initial ranking positions. For instance, top-ranked pages for transactional queries saw 3.2 times more clicks when included in AI Overviews compared to those excluded. Similarly, lower-ranked pages for informational queries received twice as many clicks when featured in AI Overviews than those on search engine results pages (SERPs) without them.

The study further differentiates the impact based on query intent. For informational queries, AI Overviews tended to divert traffic from webpages in the first two positions but increased traffic for those ranked between positions three and ten. In contrast, for transactional queries, webpages included in AI Overviews benefited from increased traffic regardless of their position on the first page of Google results. This suggests that AI Overviews can alter user engagement patterns, potentially diminishing the advantage traditionally held by top-ranked pages.

What It Means These findings underscore the evolving dynamics of search engine optimization in the context of AI integration. As AI Overviews become more common, relying solely on high SERP rankings may no longer guarantee reliable traffic. Content creators and website owners might need to adapt their strategies to enhance the likelihood of being featured in AI Overviews, thereby maintaining or improving their visibility and user engagement in an AI-driven search landscape.

Google Continues Sifting Spam out of Reviews

The News A recent email from Google is raising suspicions that the crackdowns on spam-type reviews may continue. There have been a lot of reports lately about reviews being removed, ranging from spammy 1-star reviews to suspicious or incentivized 5-star reviews. Google offers recommendations in the email to keep feedback genuine and in line with its guidelines.

What It Means Google’s review cleanup effort appears to be ongoing, and not just a one-time sweep. We’re likely to continue seeing removal of reviews that Google deems as spam or in violation of its guidelines. It’s important for businesses to follow best practices when it comes to review management in order to protect their visibility in search.

New Review Attributes from Google

The News Users across the web are noticing new review attributes designed to elicit more details about businesses. It’s not widespread yet, but a few examples are showing the following new attributes:

Wait times
Noise level
Group size suitability
Seating options

These attributes are likely supporting Google’s Ask Maps feature, and feeding answers to popular questions about a business.

What it Means Google relies on reviews as a signal for search ranking, and prompting users to answer additional questions indicates that their value remains steady. Any prompt that gets customers to provide important information about a business will only increase the usefulness of reviews, so it’s no surprise that Google is expanding these details in the review modules.