By Björn Jeffery, SvD Tech Brief. Published in Svenska Dagbladet on 25 April 2025.
Google beat expectations for the start of the year, but the big risks lie further ahead. Having lost three court cases in succession, many are now wondering whether we are approaching the end of Google as we know it.
As an investor, it is easy to love Google. The advertising on its search engine has been the perfect product — predictable, growing, and extremely profitable. If you use the internet, it is almost impossible to avoid the ads.
But for the first time in a long while, there are serious storm clouds gathering. In less than three years, ChatGPT has accumulated 160 million daily users — four times more than Google’s equivalent product, Gemini. OpenAI, the company behind ChatGPT, is shaping up to be a genuine challenger to the dominant search engine. And a threat to the advertising revenue — for the first time in over twenty years.
On top of that, the court cases have started piling up. After three consecutive defeats, Google has been found to be running illegal monopolies in various segments of its business. The otherwise rock-solid foundation of the world’s fifth-largest company has begun to show cracks.
It was therefore something of an uphill situation when Sundar Pichai, CEO of Google’s parent company Alphabet, came to present the quarterly results. Not because the numbers were bad — on the contrary, they beat expectations — but because many had their attention fixed on the future rather than on the quarter just passed.
Pichai presented a healthy company that exceeded analyst estimates on both revenue and profit. And it was precisely the search advertising that drove the strong results. The company is under pressure — but for now, users are still searching and clicking freely. The share price jumped in after-hours trading but has lost considerable ground since the start of the year.
The aforementioned court cases hovered in the background throughout the presentation. The most recent ruling came just before Easter. Google has said it will appeal, meaning it will likely take several years before everything is fully resolved. But as an indication of what the future may hold, it is concerning.
The cases covered, for example, the search engine itself and the agreement with Apple that made Google the default on all iPhones. The most recent ruling concerned advertising technology — the very core of Google’s revenues. If this is being established as unlawful in its home market, what might similar processes look like in an increasingly tech-sceptical EU?
Google’s monopoly-like position has, until now, been seen as a positive by investors — an almost impregnable fortress where giants like Microsoft, for all its billions spent on its Bing search engine, could not even make a dent. The problem lies in what the consequences of the rulings could eventually be. For even if it is unusual to go to such lengths, there is a good deal to suggest that Google could end up being broken up.
Looking back a considerable distance in time, to 1911, the American Supreme Court determined that Standard Oil had become too powerful and was distorting competition in the oil market. A total of 34 new companies were created from Standard Oil, two of which eventually became the now well-known Chevron and ExxonMobil. The purpose of breaking up the company was to increase competition in the market.
That sounds almost self-evident. But on the internet, monolithic companies like Google, Facebook, and Amazon have been allowed to operate largely unimpeded since the early 2000s. Microsoft faced a similar process over its web browser Internet Explorer, but managed to reach a settlement in 2001 that kept the company intact. The concessions Microsoft made, however, benefited Google directly. Its browser Chrome was given a fair chance — and broke through in a very big way.
Now the situation is reversed. In court, OpenAI, the company behind ChatGPT, testifies that it would happily buy Chrome from Google if that were possible. The search engine DuckDuckGo testified that the value of Google’s browser could be as much as 50 billion dollars. Consider what would happen if every search made through Chrome today led to ChatGPT instead of Google. The global search market would change overnight.
For the rest of the world, tariffs and trade barriers are the dominant concern right now. And that will affect Google too — not least as companies like Shein and Temu scale back their advertising spending. But for Sundar Pichai, the tariffs turned out to be a relatively minor matter to contend with. For now, the advertising revenue keeps rolling in — predictably and profitably, as it always has. But if Google is forced to sell parts of its business, investors’ favourite could soon become a very different type of company. Whether it wants that or not.
