Imagine you own an ice cream shop. You sell vanilla cones, and they do great.
Then one day, you add cookies-and-cream cones. Suddenly, a lot of your vanilla buyers switch to cookies-and-cream.
You didn’t really gain new customers—you just moved people from one of your own products to another. That’s product cannibalization.
At first glance, this seems bad: you’re “eating your own sales.” But sometimes it’s actually smart, because if you don’t do it, someone else will. If another shop offers cookies-and-cream, your customers might leave you completely.
Why Big Companies Do It
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Apple: The iPhone killed the iPod. But Apple didn’t mind because the iPhone made way more money. Better to “eat” their own iPod sales than let another company win.
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Netflix: First DVDs by mail, then streaming. Streaming cannibalized DVDs—but if Netflix hadn’t done it, Hulu or Disney+ would’ve taken over.
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Google: YouTube results sometimes steal clicks from regular website links, but Google owns YouTube too—so it still wins.
How This Relates to Google + AI
For years, Google made money showing ads next to links. Now they’ve added AI Overviews and AI Mode, which give you instant answers instead of just links.
That means fewer clicks to websites (and even fewer ads in some cases). So in a way, Google is cannibalizing its own search engine.
Why would they do this?
Because if they don’t, people might just use ChatGPT, Perplexity, or another AI search tool instead—and Google would lose completely.
The Risk and Reward
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Risk: Google makes less money from ads, publishers lose traffic, and users might not stick with AI Mode.
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Reward: If Google figures out how to make money with AI answers (like better ads), they’ll keep their spot as the #1 way people search online.
The Lesson for Marketers
Cannibalization isn’t always a mistake—it’s often survival.
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If there’s a tech leap (like AI or streaming), and
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If customers are incentivized (cheaper, faster, more fun, or cooler)…
then cannibalization can actually grow your business.
Think of it like this:
Would you rather steal your own lunch… or let someone else eat it?
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