The Biden administration’s crackdown on Google’s search dominance might force the tech giant to sell Chrome, the world’s most popular browser — a move that could hit Alphabet where it hurts the most.
Chrome is Google’s traffic cop, search enforcer, and ad revenue rainmaker. It dominates the internet with more than three billion monthly users — just about the same as Instagram and TikTok combined!
Take it away, and Alphabet’s grip on the internet loosens. Big time.
What’s at stake?
The tech heavyweight will oppose the move vehemently at the next trial in April. But if the US government gets its way, it could potentially be catastrophic for Google and how it generates business.
- Chrome drives users to Google’s search engine.
- No Chrome means less data, which means weaker search dominance.
- The result? Fewer cookies, more irrelevant ads, lower revenue.
It isn’t clear how much money Chrome brings in. Google bundles the business under the “Google Services” segment along with Search, Play Store, YouTube, Android and Pixel devices.
But a Bloomberg Intelligence analyst valued the business at around $20 billion. That would mean Chrome brings in $2 billion to $4 billion in annual revenue, Needham & Co analyst Laura Martin tells MONIIFY.
What’s the play?
Losing Chrome would be more than just a blow.
Alphabet would struggle to keep pace with its Magnificent Seven peers, especially as rivals challenge its search supremacy. The result? A revenue growth slowdown that could shake Alphabet’s standing in the tech world.
For a company built on staying ahead, being forced to let go of Chrome could feel like losing its crown jewel.
Would you be better off looking into the remaining six in the Mag 7 complex until clarity emerges? That depends if you, like many others, think a Donald Trump administration will deal differently with Big Tech. (But more on that below, so keep reading.)
More pain
The Department of Justice also wants to end Google’s exclusive tie-ups with phone makers and browsers.
That will take the pain beyond Google. Apple stands to lose $20 billion every year — the fee Alphabet pays to keep Google as the default search engine on Safari. Mozilla and Firefox have similar deals.
Phone-makers will lose money they earn from pre-installing Google services — Samsung nets $2 billion annually.
Google may also be forced to sell Chrome OS, its operating system that comes in entry-level laptops by Acer, HP, Lenovo, and Dell.
Google chief legal officer Kent Walker said the “overboard proposal” would break many Google products, beyond just search, and slow down the company in the race to AI domination.
How does this end?
Well, Google’s search dominance is already under siege by Microsoft’s AI-powered Bing and upstarts like Perplexity.
Everyone from OpenAI to Amazon and Meta is working on a search function, and by the time Google is done with the litigation, say two or three years, the market would have several search competitors.
“Google could argue it’s no longer a monopoly,” says Martin.
Then again, if the US’ record is anything to go by, the sale may never happen. The last big tech breakup was AT&T in 1984. The DoJ couldn’t crack Microsoft in 2000 either, opting for a settlement instead.
And there’s the MAGA wildcard: Trump will be back in office soon, and he’s not exactly the DoJ’s biggest fan.
This could shift the winds in Google’s favor, Alex Haffner, competition lawyer at UK-based firm Fladgate, tells MONIIFY. Google will be lobbying hard at Mar-a-Lago, he says.
