Perplexity CEO: Browser Tracks Online Activity for Hyper-Personalized Ads, Aims to Challenge Google

Perplexity, a startup founded in 2021, is making significant strides in the realm of artificial intelligence (AI) by developing its own web browser, Comet, set to launch this May. The company's CEO, Aravind Srinivas, revealed on the TBPN podcast that the primary goal of Comet is to collect comprehensive data on user behavior both within and outside the browser. This includes tracking purchase history, visited hotels and restaurants, browsing habits, and more. The data will be used to create "hyper-personalized" ads, which Srinivas believes users will accept due to their higher relevance compared to generic ads. Despite its ambitious plans, Perplexity has faced challenges. One significant issue is the public and regulatory scrutiny over data privacy and user tracking. Srinivas argues that the collected data will not only cover work-related queries but also personal interests and lifestyle choices, allowing the company to build detailed user profiles. However, this approach mirrors that of tech giants like Google, Meta, and Apple, which have already implemented similar tracking mechanisms. For instance, Google's Chrome browser and Android operating system, Meta’s Pixel tracking technology, and Apple’s default tracking of user locations are all tools used to optimize ad targeting. These practices have sparked widespread concern and mistrust among users and regulators, particularly in the United States and Europe. Google, currently embroiled in an antitrust lawsuit filed by the U.S. Department of Justice, faces stringent demands to relinquish control over parts of its business, including the Chrome browser. Both OpenAI and Perplexity have expressed interest in acquiring Chrome if it is mandated for sale. This indicates the perceived value of browser data for enhancing AI-driven services and advertising strategies. Srinivas believes that the ongoing antitrust trial has provided smaller companies like Perplexity an opportunity to gain footholds they previously could not secure. Without the legal proceedings, Google might have applied more pressure to block partnerships with Perplexity and reduce its revenue share with device manufacturers. Perplexity's AI-powered "Q&A engine" has gained substantial traction, boasting nearly 30 million monthly active users and handling around 600 million queries—roughly 14% of Google's volume. To expand its reach, the company has secured a deal with Motorola to pre-install Perplexity's app on the Razr series phones. Users can access the app through Moto AI by typing “Ask Perplexity.” Talks are underway with Samsung for a similar partnership, although Srinivas did not confirm the details. Perplexity is also exploring collaborations beyond just device manufacturers. The company received an investment from Samsung and may deepen its relationship further. Additionally, Perplexity aims to integrate with iOS devices despite Apple's stricter control over third-party apps. By leveraging the Apple EventKit SDK, Perplexity can access certain core functionalities of iOS, such as reminders, podcasts, music, and maps. It can also use deep linking to connect users with services like YouTube and Uber, offering functionality that often surpasses native AI assistants like Siri, especially in media searches and ride-sharing. The value of browsers in AI competitions cannot be overstated, according to Srinivas. Browsers serve as a "containerized operating system," providing flexible access to various third-party services, scraping web pages, and executing user commands. This capability allows Perplexity to gather more contextual data, thereby delivering more personalized services. The company is investing heavily in its browser development, seeing it as a crucial component in its strategy to outcompete larger players. Regarding data usage, Perplexity respects website robots.txt files, collecting only data that is allowed to be scraped. For restricted data, Perplexity relies on third-party data providers. While this has alleviated some concerns from content publishers, there are still instances of dissatisfaction. Perplexity has taken steps to address these issues by paying fees to some content providers. Recently, Perplexity completed a new funding round, achieving a valuation of $18 billion. The funds will primarily be used to develop cutting-edge AI models and enhance service quality and personalization. Srinivas emphasizes that the future competition in AI will revolve around personalized service rather than mere question-answering capabilities. He sees Perplexity’s advantage in its ability to collect and analyze cross-platform behavioral data through its browser and mobile application, offering a more comprehensive understanding of users. In another notable move, Perplexity considered acquiring part of TikTok’s business. However, ByteDance, TikTok’s parent company, was unwilling to cede control over its algorithms, leading to the abandonment of this plan. Industry insiders suggest that while Perplexity operates under immense pressure from larger competitors, its innovative approach to personalized services and multi-platform integration could give it a unique edge. As a young and dynamic player in the AI field, Perplexity has attracted significant attention and investment, positioning itself as a promising contender in the rapidly evolving landscape of AI and digital advertising. Perplexity's focus on hyper-personalized ads through extensive user data collection and its strategic partnerships with major device manufacturers highlight its ambitious efforts to challenge established tech giants. Whether it can successfully navigate the complex issues of privacy and regulation remains to be seen. However, its robust funding and innovative technology indicate a strong potential for growth and disruption in the market.