Streets Ahead: Cheeg Sues Google, Terakeet & AI Overviews

In this week’s Streets Ahead update, SOCi discusses the first major lawsuit against Google’s AI Overviews as well as the Terakeet study highlighting the positive impact of AI Overviews on website traffic.

Chegg Sues Google Over AI Overviews, Claims Major Revenue Loss

The News  Chegg, a well-known education technology company specializing in study resources and homework assistance, has taken legal action against Google, alleging that the tech giant’s AI Overviews feature is damaging its business. The lawsuit claims that Google’s AI-generated summaries, which provide direct answers to user queries by extracting content from third-party websites, have significantly reduced traffic to Chegg’s platform. According to Chegg, this decline in website visits has directly impacted its revenue, forcing layoffs and creating broader business challenges.

At the heart of the lawsuit is the accusation that Google is engaging in unfair competition by leveraging Chegg’s intellectual property without adequate compensation. The company argues that by keeping users within the Google search ecosystem—rather than directing them to source sites—Google is not only hurting its business model but also disrupting the digital content landscape. Many online publishers depend on search-driven traffic for ad revenue and user engagement, making Google’s AI Overviews a potential threat to their financial stability.

Google, however, has rejected Chegg’s claims, stating that AI Overviews are intended to improve user experience by delivering fast, relevant information. The company insists that the feature does not harm web publishers but instead redistributes traffic more broadly. Additionally, Google maintains that its practices comply with copyright and fair use regulations, asserting that the lawsuit lacks merit.

As this legal battle unfolds, it highlights larger concerns within the digital economy. The case raises important questions about how AI-generated content affects content creators, website traffic, and the balance of power between tech giants and online publishers. The outcome could have significant implications for the future of AI-driven search and digital content monetization.

 Why This Matters  This is the first widely publicized lawsuit against Google’s AI Overviews feature. Chegg’s lawsuit raises critical questions about intellectual property rights and fair compensation. If Google’s AI uses third-party content to generate responses without driving traffic back to the source, it challenges the traditional digital publishing model. This issue extends beyond Chegg—many content-driven businesses, including news organizations and educational platforms, face similar risks

The Impact of AI Overviews on Website Traffic

The News  A recent study by Terakeet challenges the notion that Google’s AI Overviews always reduce traffic to external websites. The research indicates that websites featured in AI-generated summaries actually experience significant increases in clicks, while those excluded often see substantial declines.

According to the study, webpages cited in AI Overviews receive more traffic, regardless of their initial ranking. For example:

• Transactional queries: Pages ranked at the top received 3.2 times more clicks when included in AI Overviews compared to those left out.
• Informational queries: Lower-ranked pages (positions 3-10) saw double the clicks when featured in AI Overviews compared to traditional search engine results pages (SERPs).

The study also highlights how query intent affects traffic patterns:

• Informational searches: AI Overviews tend to reduce traffic for the top two-ranked results but increase clicks for lower-ranked pages.
• Transactional searches: Websites in AI Overviews see increased traffic across all ranking positions, reshaping the competitive landscape for businesses relying on search visibility.

Why This Matters  AI Overviews are redefining how users engage with search results, potentially leveling the playing field for lower-ranked sites while altering the traditional dominance of top-ranking pages. For businesses and content creators, adapting to this shift will be critical in maintaining and growing their online visibility. As AI Overviews gain prominence, securing a top spot in traditional search rankings may no longer guarantee consistent traffic. To stay competitive, content creators and website owners must refine their strategies to increase their chances of being featured in AI-generated summaries, ensuring sustained visibility and engagement in an AI-driven search ecosystem.