(BFM Stock Exchange) – The action suffered on Wednesday after press information reporting that the group’s domination in online research was questioned. This is added to the risks of dismantling of his advertising activity.

Like the other Wall Street “7 magnificent”, the start of the year of alphabet is clearly to be forgotten on the side of Wall Street. Google’s parent company has abandoned 18.5%since the start of the year, not much better or even worse than Apple (-21.4%), Amazon (-12.5%) or Nvidia (-12.6%), yet more directly concerned than Alphabet by the direct impacts of American customs duties.

Alphabet had however, on April 24, delivered solid and reassuring results in the first quarter, marked by the good health of its advertising revenues linked to online research, the heart of the reactor of its profitability.

But several news and information have since recalled how alphabet, and more particularly Google, remains a citadel, certainly imposing, but besieged on several sides.

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Remedies that are scary

Last week, the Financial Times reported that the American Department of Justice (DoJ) had told a federal judge that he had to put pressure on the group to sell key parts of his online advertising activity.

According to Reuters, these transfers concern Google “ADX”, an advertising platform which allows publishers, advertisers, advertising agencies, to better monetize their advertising spaces with a wider network, as well as “DFP”, an advertising server, that is to say another tool for site publishers.

These proposals for “remedies”, or “concessions” in good French, follow the verdict of a judge of the state of Virginia, Leonie Brinkema, who had estimated in April that Alphabet exercised an illegal monopoly in online advertising, more specifically questioning “the servers of advertising publications” and “the advertising markets” “Remedies” suggested by the Doj.

This subject evolves in parallel with another file called “US VS Google”, opened in 2020 and in which a judge of the Columbia court estimated last year that Google exercised a monopoly power in online advertising. The DoJ plans, in this context, to force alphabet to sell its Chrome browser or its Android operating system.

However, these would be radical measures which could take years to be implemented. “We believe that it would be exaggerated and that Google would obviously call on these decisions, which would remain in the judicial system for years”, Dan Ives, of Wedbush, last year.

Chatgpt on the horizon

Apart from the numerous and endless judicial serials, a slightly newer subject points to the horizon: competition. On Wednesday, the Action Alphabet plunged 7.3% after several media reported the words of Eddy Cue, vice-president of Apple in charge of his Services division, during a hearing as part of a trial against Alphabet.

The leader said that Apple was thinking of adding fuel search engines to artificial intelligence (AI) generative for his Safari browser, operating on Mac and iPhone. Recall that Alphabet pays about $ 20 billion a year for Google to be the default Safari search engine.

But the most important and worrying point, notes Bloomberg, is that the research volumes recorded on Safari fell in April and this for the first time in more than 20 years

“If you are wondering what’s going on, it is because people use Chatgpt. They use Perplexity (a search engine operating at generative AI and defying chatgpt, editor’s note). I sometimes use it ‘,” said Eddy Cue, quoted by Fortune.

These statements have frozen investors, fearing that search engines using generative artificial intelligence end up stealing Google. Or at least seriously weakening his quasi-monopoly on online research. At the end of April, our colleagues from BFM Tech reported that Chatgpt Search, the OPENAI search engine, had 41.3 million monthly active users in Europe.

Eddy Cue’s testimony “made nervous investors about the future of online research for alphabet”, notes Morningstar.

“In addition to highlighting antitrust affairs against large technological companies, this news reminds us that if the ‘seven magnificent’ benefited enormously from the optimism of AI, their existing corporate models are also faced with the risk of disturbance induced by AI”, underlines its side Deutsche Bank.

Alphabet reassures

Alphabet came out of the wood to calm market worries. Following this information, the company indicated on a blog that it always observed growth in requests on its online research tool. “These figures include an increase in the total number of requests from Apple devices and platforms,” ​​said the company.

“More generally, as we improve research with new features, Internet users find that Google Search is more useful for more of their requests” continued the company.

Several analysts have also tempered the mind, reports Yahoo! Finance. In particular those of JPMorgan who consider the reaction of the “exaggerated” market insofar as Apple especially tried to demonstrate that the online research market was competitive. This in order that Alphabet continues to pay very expensive for Apple to install Google default on Safari.

Apple “has an interest in Google appearing lower in the field of research, while emphasizing the intensification of competition in the field of research and the significant impact on Apple activities”.

“Given Google’s substantial payment from Apple to be its default research provider, it is logical that Apple highlights statistics arguing the idea that Google is not anti -competitive in the field of online research, citing the risks of AI providers, which could help Google to call against allegations of anti -competitive behavior (Eddy Always offer the best financial conditions) “, notes Jefferies, also quoted by Yahoo Finance!

The fact remains that the evil is done and that the market may keep this risk in a corner of the head. “The fundamental question is whether alphabet will lose his milk cow,” said Bloomberg Art Hogan, chief strategist at B. Riley Wealth Management. “This is the first time that Alphabet has really faced competition in the field of research since the creation of this category, and we have already seen flaws in his armor,” he concludes.