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19 Feb, 2023
1 min time to read

Microsoft is reportedly exploring ways to monetize its generative AI-powered chatbot.

According to Reuters, the company is in talks with advertising agencies to determine how it can incorporate advertisements into the chatbot.

Microsoft is currently testing traditional search ads on the chatbot and is working on a more conversational approach to delivering information. It is anticipated that this will bring in more users, who in turn will attract advertisers. While the chatbot is still in the early stages of development, only a small number of users have access, and millions more are on the waitlist. As such, Microsoft may not be in a rush to incorporate ads right away.

One possible location for the ads is in the links that the chatbot uses for citations in its responses. Microsoft has said that it will work with partners and advertisers as it starts exploring the potential of the technology for ads.

As the chatbot gains popularity, it has the potential to reshape how people find information. Given how important search revenue is to companies such as Microsoft and Google, monetizing the chatbots is the obvious path to take. For instance, more than half of Alphabet's $282.8 billion revenue for 2022 came from search.

While it remains to be seen how Microsoft will incorporate ads into its chatbot, this move is expected to have implications for how companies approach advertising in the age of generative AI chatbots.