Episode summary
Why an AI 'Death Spiral' Threatens the Internet
Wall Street Week
· · Guests: Rand Fishkin, Caitlin Petre, Neil Vogel
Summary
AI-powered search is reshaping the web by keeping more users inside search and chatbot interfaces instead of sending them out to publishers. The host frames this as a shift in the Internet’s economics: content has long been funded by clicks and ads, but zero-click search and AI summaries reduce the traffic that supports that model. Rand Fishkin says the high-water mark for Internet traffic was 2022 and that Google’s share of searches sending users to third-party sites has fallen from more than 70% in 2011 to the mid-40s and declining.
Caitlin Petre argues that news sites relying on Google referrals are already seeing dramatic traffic declines, and she warns that AI could deepen the same business-model collapse that hit local newspapers in the print-to-digital transition. The episode treats this as a possible “death spiral”: if fewer publishers can afford to create content, the training and reference material AI systems depend on could shrink as well.
Neil Vogel offers a more optimistic counterexample. He says People Inc. has seen Google traffic fall from about 75% of audience in 2022 to 25% now, yet the company remains profitable by leaning on strong brands, social platforms, licensing deals with AI companies, and blocking crawlers unless they pay. He argues AI creates both risk and opportunity, and that publishers with valuable brands can still grow even as the broader web weakens.
Key takeaways
- Rand Fishkin says the high-water mark for Internet traffic was 2022 and that Google referrals to third-party sites have kept falling since then.
- Caitlin Petre warns that dramatic traffic losses from Google could eliminate more news sources and reduce content for AI systems to train on.
- Neil Vogel says People Inc. cut its dependence on Google Search from about 75% of audience in 2022 to 25% now, while staying profitable.
- Vogel says People Inc. makes real money from licensing content to LLMs and AI engines and from blocking AI crawlers unless they pay.
- The host and guests argue that AI could create a feedback loop where less paid content means less content for AI, prompting a more closed, AI-shaped internet.
Notable quotes
“-We believe the high-water mark for Internet traffic, like that was sent out from social media and search and AI tools, which were quite nascent at the time, was 2022”
“in 2011, Google was sending north of 70% of all searches to a third-party website, a website not owned or controlled by Google, and today that number is in the mid-40s and falling”
“-What happened was, our audience, right, and we reach half of America each month, our audience on the internet was 75% from Google Search, 2022, maybe a little bit more, maybe a little bit less, but ballpark that”
“If content providers don't get paid for that, sooner or later, there's not going to be as much content”
How the episode opens
Westin: This is a story about big changes on tiny screens. Since its inception, the Internet has become where we turn for content, content we mostly access through search, and that's mostly free. But of course, it's not really free.
When we searched on platforms like Google, we were directed to web pages created by publishers who got paid for all those ads we spent time looking at. Now all that is changing, and as AI becomes the new gateway to the web, it's transforming the economics of the Internet. -We believe the high-water mark for Internet traffic, like that was sent out from social media and search and AI tools, which were quite nascent at the time, was 2022.
Essentially, over the last four years, those numbers have been dropping. Westin: Rand Fishkin is an author and entrepreneur who specializes in online search, the main way that most of us interact with the web. -I do a lot of research with clickstream data, which essentially looks at devices and what they visit and don't visit.
Whereas in 2011, Google was sending north of 70% of all searches to a third-party website, a website not owned or controlled by Google, and today that number is in the mid-40s and falling. That clearly indicates this zero-click trend. Westin: Zero-click, it's a term for an online search result that doesn't lead to any other web pages.
That can be good news for users if their question has been answered quickly and correctly. No need to spend time scrolling through all that text and pages of ads. But if you are a publisher counting on that click to bring traffic to your website and to sell those ads, it's very bad news, which means the creators of all that web content have to rethink the game.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai-powered search
- zero-click searches
- journalism economics
- content licensing
- brand diversification
Companies and tickers mentioned
- People Inc.
Watch the episode
Watch “Why an AI 'Death Spiral' Threatens the Internet” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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