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Key Points:
- Except for Russia and China, Google (NASDAQ: GOOG) has controlled the search engine business globally; but now it faces fierce new competition.
- Both U.S. and European authorities are suing Google, so there is a chance the company is forced to break into component parts
- Should rivals in artificial intelligence acquire more market share, Google may benefit from reduced monopoly pressure on their core search business
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Transcript:
[00:00:00] Doug: So, you know, Google has owned the search engine business and in the United States, and basically the rest of the world, except for like Russia and China for a decade and a half, there is no one else. Okay. Outside those two countries, there, there is no other search engine. It looks to me like they may have really big competition starting now.
[00:00:26] Lee: Yeah, it really appears that way, , and it’s not like, um, the new competition, can be crushed like Netscape was or Ask Jeeves or things of that nature that really didn’t have much reach and big data scan. But it, it’s introspect, I think is, is, is the biggest challenger. And, but it’s not just that. It’s the companies and Musk is doing it.
[00:00:51] Lee: All of the companies that are starting, you know, high speed AI search. And granted, as we’ve discussed, Google has that factored into their search, but it’s got a, at some point it’s going to have to be into an app, you know, like the Google app or some application like that. And there’s just a lot of challenge coming at them.
[00:01:14] Doug: Yeah. So for the first time in a long time, I’m worried about Alphabet’s earnings. You know, you get worried in a recession that they get hit like all other advertising, but I’m now worried that they’ve got a full time competitor that it doesn’t matter what the economy is good or bad. These, the, the AI search guys, they ain’t going away and I don’t know, there are none wins
[00:01:41] Lee: And I think something that’s interesting here is again, and it may get better for them with, with the change in administrations. You know, we know regulations will be, the brakes will be slammed on regulations and they were, they will go away and maybe, you know, the DOJ will back off because they have enough of their own problems coming their way.
[00:02:02] Lee: They may back off, but I mean, Google is right in the sites of the eu. They’re right in the sites of the DOJ and they may have to split it up.
[00:02:12] Doug: Well, it may be that the AI search engines will help them all of a sudden if they start to lose a lot of market share. The Justice Department may say, you know, that really isn’t a monopoly anymore.
[00:02:24] Doug: All these AI guys have their own search engines. They’re going to take a beating anyway. We’re going to leave them alone.
[00:02:30] Lee: Yeah. That’s a good point. And that’s a potential case. And you can, you can, you can rest assured because there was a lot more support. out of Silicon Valley for Donald Trump now than there was four years ago.
[00:02:45] Lee: And, you know, maybe they’re at the point where they may get a little helping ham from Washington on some of this. So, yeah, but if it’s addition by subtraction, because they’re losing, um, Business.
[00:03:02] Doug: Maybe the legal cases will go away because the AI guys.
[00:03:05] Lee: Yeah, it, it, it could bail them out or at least, at least help put it on the back burner.
[00:03:10] Doug: To me, Alphabet are short for two reasons. One is regulators. The other one is people who will beat them up so bad that they won’t be regulated.
[00:03:18] Lee: And the best thing like we’ve discussed in the past, one of the best things for them may be a breakup. You know, the sum of the parts may be, especially if it’s spun off to shareholders, like we’ve discussed in the past.
[00:03:31] Lee: I mean, maybe that is the best, um, idea for, for a company of that size.
[00:03:36] Doug: Yeah.
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