Google’s Future Could Be In Trouble Due To OpenAI Browser
The primary source of data used to target Google advertisers is Alphabet’s (NASDAQ: GOOG | GOOG Price Prediction) Chrome browser. Its desktop market share is 66%. Its mobile share is slightly higher. AI software market leader OpenAI plans to launch…
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The primary source of data used to target Google advertisers is Alphabet’s (NASDAQ: GOOG | GOOG Price Prediction) Chrome browser. Its desktop market share is 66%. Its mobile share is slightly higher. AI software market leader OpenAI plans to launch a browser of its own. If it gets enough adoption, it could cut into Google’s revenue sharply.
Although it is unclear what level of market share OpenAI would need to have to challenge Chrome, Reuters claims Open AI need to get 500 million users to be a force in the browser segment
For Google, Chrome is the product that gets many of its search features and other products like Gmail and its AI product Gemini onto desktops and wireless devices. Google’s advertising business is about two thirds of parent Alphabet’s revenue. The AI threat is among the reasons Alphabet’s stock is down 7% while the S&P 500 is up 7%.
However, Alphabet has a greater problem than AI competition today. The Justice Department is asking that it be broken into pieces. Its argument is that Chrome’s market share gives Google a monopolist’s position. Alphabet’s search market share at over 90%. According to The Wall Street Journal, “In the span of a year in the U.S., federal courts have judged Google a search-engine monopolist and an ad-software monopolist.”
What is unclear is what a lead in the AI business means in terms of dollars. OpenAI’s annual revenue run rate is $10 billion. No other competition comes close based on this yardstick. Alphabet’s revenue last year was $350 billion. A Bloomberg analysis shows OpenAI can’t be cash flow positive until its revenue reaches $125 billion.
The metrics for downloads and profit among AI software products is a mess. Development of products are still in early stages. Huge numbers of people use AI, but it could be years before it becomes clear that it is an essential part of most people’s lives and the profitability of large numbers of businesses.
Finally, Google has one advantage, and that is its brand equity. Many people who want to use the internet to get information will probably not break the Google habit for a long time
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
