The Rundown - Deep Dive: The Dual Threat Challenging Google's Business

Episode Date: April 26, 2025

Google is reeling from back-to-back courtroom defeats—one targeting its search-engine defaults, another striking at its ad-tech stack—while the Justice Department weighs unprecedented remedies that could compel the company to shed Chrome or even Android. Yet antitrust pressure is only half the story: OpenAI’s ChatGPT and other generative-AI tools are coaxing users away from the familiar “ten blue links,” challenging the very business model that funds Google’s empire. This weekend’s Deep Dive dissects the litigation, sizes up the realistic odds of a breakup, and explores whether AI disruption might erode Google’s dominance faster than any regulatory decree.The content of the video is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures.Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about Google. The search giant has been spending a lot of time in court these days, fighting regulators that are trying to break them up. The company is facing multiple lawsuits from the government regarding its dominance in search and their ad tech. You know, these days it feels like Google is spending more money on lawyers than they are on AI. So in this episode, we'll break down the lawsuits that Google is facing from the government.

We'll talk about if Google will actually. be broken up and we'll discuss that the biggest threat to Google is actually the DOJ or or chat GPT. We've got a great show for you today. Let's dive in. Google is spending a lot of time in court these days. The Department of Justice has sued them multiple times over the last few years, claiming that they are a monopoly.

So let's go through some of these lawsuits and see what they're claiming. The first major lawsuit came back in October of 2020. It was followed by the DOJ during Trump's first administration. The DOJ argued that Google illegally maintained their search monopoly by basically paying everyone billions of dollars to be the default search engine on phones and browsers. It's that Google has been paying Apple, Samsung, Mozilla, Firefox, just to name a few. In fact, during the trial for this lawsuit, it was revealed that Google was paying Apple like $20 billion a year to be the default search engine on the iPhone.

So if all that seems sketchy to you, then you would be on the side of the courts. In August of 2024, a federal judge agreed with the DOJ that these moves by Google were anti-competitive. But this wasn't the only L that Google took in court. Google got hit with another lawsuit in 2023 by the DOJ, this time under the Biden administration. This was regarding their ad tech technology. The DOJ claimed that Google illegally monopolized key parts of the ad tech market and tied their products together unfairly. And earlier this month, a federal judge agreed with the DOJ. Again. So Google has taken back-to-back L's in court in the span of eight months.

But now the question is, what's going to happen next? Is Google actually going to get broken up? Well, it's a little complicated. So let's talk about it. What could breaking up Google actually look like? Well, the DOJ has thrown out some interesting ideas. The first big idea is forcing Google to sell Chrome. The DOJ's argument here is that Google owning the world's most popular browser helps them funnel users to Google search. It's like owning the highway and all the billboards along the highway. And Chrome has already drawn interest from some AI companies. Both OpenAI and Perplexity, the AI search engine, have said they would be down to buy Chrome. So this would be a shocking move, but I can see it happening.

The other threat by the DOJ is forcing Google to spin off Android. Similar argument to Chrome here, owning the most popular mobile operating system allows Google to funnel more users to their search engine. Now, I personally would be shocked if this happened. In fact, I think the DOJ seems to be holding this as a backup threat if other fixes don't work. Now, as for Google's ad tech case, the DOJ is considering forcing Google to sell off parts of its ad empire. You know, separating the tool publishers use like Google Ad Manager from the auction house tech called AdX. So this would stop Google from controlling all sides of the transaction. Now, this business makes up about 10% of Google's total revenue,

so it would hurt if Google had to sell this off, but it wouldn't be that bad. It wouldn't be as bad as having to sell off Chrome or spin off Android. But that brings me to YouTube. While YouTube hasn't been the main focus of these specific DOJ cases, I wonder if regulators would force Google to separate YouTube from the rest of the company. According to estimates from Moffat-Nathanson, YouTube would be worth north of $500 billion as a standalone company. Okay, but like is any of this stuff actually going to happen?

Is Google actually going to be broken up? Well, according to some historical examples, probably not. Now, before you start picturing Larry Page, auctioning off parts and pieces of Google, let's take a quick look at history. Another big tech giant went through a similar experience. I'm talking about Microsoft. They had a pretty intense antitrust battle with the U.S. government back in the late 90s in early 2000s. The government ended up winning the case against Microsoft and a judge

ordered Microsoft to be broken up. But that breakup order was later overturned on an appeal. But still, the pressure forced Microsoft to change its way significantly, which opened the door for competitors like Google. So if we're going off of Microsoft's example, a full breakup for Google is unlikely. Google has already appealed these rulings. I mean, these appeals are likely to take years and it might end up to the Supreme Court. We'll have to see. And the other challenge of trying to break up Google would be the complexity of it. Google is this huge company and the way that search and ads and Chrome and Android all work together, it's like this beautiful data-collecting money-making machine. Trying to chop off parts and pieces might be easier said than done. The more

probable outcome are court-ordered changes, you know, behavioral remedies. This can include banning Google from doing exclusive deals to be the default search engine on a phone or a browser. It could also force Google to give rivals access to some data or systems. Maybe it makes it easier for users to choose alternatives or more choice screens like they have in Europe. Pretty sure most people ignore those anyways. So even if a full breakup doesn't happen, there could be some changes at Google. Now, if the government's plan is to weaken Google's dominance in search, they might just be better off waiting because the biggest threat to Google's search dominance,

Might not be these lawsuits, it might actually be chat GPT. There is no question that Google has been a dominant force in search over the last couple of decades. You might even call them a monopoly. But that might be coming under threat. And I'm not talking about the DOJ lawsuits. I'm talking about chat GPT and the rise of AI. AI is the biggest potential threat to Google's search dominance in decades. These AI powered chat boxes like chat GPT and these AI search engines like,

like perplexity are a better experience than Google. They answer questions directly without forcing users to click through 10 links. So people, especially younger users, are starting to use these tools for getting information instead of Googling things. Like, I'm doing this myself. I ask Chad GPT in perplexity instead of using Google most times. It's just a better experience than clicking through eight garbage SEO optimized links on Google to try to find the answer.

And look, I get it. AI can hallucinate once in a while, but the experience is getting better by the day. And the fundamental question here is if people start expecting direct answers from their search engines instead of 10 blue links, that is a massive threat to Google's money printing search ad business. Google's entire business model is putting sponsored links in search results and charging a ton of money for that. Now, to be fair, Google's search business hasn't shown any sign of weakness so far.

In fact, it's still putting up solid growth numbers, according to their latest earnings report. In Q1, Google's search business grew by 10% to over $50 billion in revenue. I mean, double-digit growth for a business that size is very impressive. So maybe we shouldn't be rushing to write Google's obituary just yet. People have a habit of doing Google searches for the last 20 years. It might take a long time to break that habit. And in the meantime, Google's not just sitting back and letting AI take their life. lunch. They're also making a huge push into AI. Like, they started putting those AI overview search

results that used to be pretty bad, but they're starting to get pretty good. So at the end of all this, it's possible that Google ends up the leader in AI as well. I mean, Google's got the data, they've got the infrastructure, they've got the resources to put AI everywhere. And the DOJ is already kind of worried about this. Part of their proposed remedy in the search case involves limiting Google's ability to use their search monopoly to streamroll the competition in AI. They're worried that Google's going to go from being a monopoly in search to becoming a monopoly in AI. So what's the big takeaway? Well, for one, Google is in some serious trouble with regulators. The DOJ has already notched two major wins against Google in court in the last eight months. Now, this doesn't mean that Google will

get broken up into pieces, but court-ordered remedies could have an impact on Google. Google's business and hurt their dominance in search. But the bigger issue here is AI. It's the wildcard. It could totally disrupt Google's search dominance, or Google could end up dominating AI as well and have another monopoly on their hands for the next 20 years. Regulators are trying to stop that from happening. Either way, it's probably a good idea to keep an eye on Google's stock price over the next

couple years and their lawyer budget. Well, all right, guys, that's it for today's weekend, deep dive. Hope you guys enjoyed today's episode. If you did, don't forget to subscribe to our podcast, especially on YouTube and Spotify. We actually filmed these deep dive episodes with video. You can watch it on YouTube or Spotify. So I highly recommend checking that out. And if you guys have any topics you want us to cover in future deep dive episodes, let us know in the comments.

One very popular one of the people that's been talking about is Palantir. We are working on an episode, so stay tuned. Hopefully in the next couple weeks we'll be doing a Palantir deep dive. Thank you guys again for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here on Monday.