Axios AI+

November 20, 2024
1 big thing: Google's fight for Chrome
The Department of Justice is expected to present proposals today to limit Google's power in the wake of an August court ruling that the giant abused its search monopoly.
Why it matters: Google's leaders will continue to be at least distracted, and potentially immobilized, by the government's antitrust assault just as the firm faces the greatest challenge in its history from the OpenAI/Microsoft alliance.
State of play: The DOJ will ask the presiding judge to force Google to sell off or spin out the Chrome browser, according to a Bloomberg report.
- It is also likely to urge the judge to demand that Google license its search results and data to third parties and competitors.
- "Break up Google" is one scenario that no longer seems to be in play, and the government has decided not to seek the sale or spinout of Google-owned Android, the world's most popular mobile operating system.
No one really knows what a sale or spinoff would ultimately mean for Chrome and its massive user base.
- Estimates of Chrome's market share vary, but they all give Chrome billions of users on mobile and desktop — and half or more of the global browser market.
- Chrome is baked into the Android mobile operating system and has long served as a key starting point for Google searches. More recently, it has become a way for Google to funnel users toward its Gemini AI services.
- Owning Chrome lets Google follow users' online activity in ways that help it target the ads that make up the foundation of its business.
Extracting Chrome from Google would require finding a buyer willing to pay up to $20 billion, per Bloomberg.
- If Google tries to set Chrome up as an independent company, the product — currently distributed free and supported by Google's advertising profits — would need to find a revenue source.
- Much of Chrome's popularity rests on the convenience of its integration with Google's search and other products.
The practical difficulty of a Chrome/Google divorce, along with the challenge of making the browser work as an independent business, have a lot of Silicon Valley observers scratching their heads.
- As Daring Fireball author John Gruber put it: "It's like saying I have to sell my left foot. It's very valuable to me, but of no value to anyone on its own."
What they're saying: "The DOJ continues to push a radical agenda that goes far beyond the legal issues in this case," Lee-Anne Mulholland, Google's vice president for regulatory affairs, said in a statement.
- "The government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership at precisely the moment it is most needed."
What we're watching: The parallels to the Microsoft case about 25 years ago are spooky, and go way beyond the simple fact that both cases ended up centering on web browsers.
- Microsoft spent so much time and energy fighting the government's antitrust case at the turn of the century that it loosened its grasp on the internet market a bit — leaving room for a small search startup named Google to thrive.
The rise of AI means the tech world is at the start of another vast platform shift, making this a perilous moment for Google to be at legal war with the U.S. government.
- It's too soon to know whether today's antitrust headaches are now similarly allowing OpenAI to play David to Google's Goliath — but that possibility is likely to be troubling Google leaders.
What's next: Whatever happens, expect it to take forever.
- The court will hold "remedy phase" hearings in April 2025, with the judge expected to rule over the summer. Then Google will likely appeal, and that process could take years more.
- At the same time, new DOJ management by the incoming Trump administration will get a chance to reevaluate its strategies. (The case was originally filed near the end of Trump's first term.)
There's always a chance for the government and Google to reach a settlement and put the case to rest.
- Meanwhile, a second major DOJ antitrust suit against Google — filed in 2023, focused on its control over the ad-tech market — continues to work its way through the courts.
2. Scoop: Meta forms product group to build AI tools for businesses
Meta is creating a new product unit to develop AI tools for the 200 million businesses that use its apps, Axios has learned.
Why it matters: Meta is an advertising company. To fuel ad growth, it needs to invest in the businesses that use its platform to interact with customers.
Zoom in: The new business AI product group will be led by Clara Shih, who until recently was the CEO of Salesforce AI.
- Shih will be responsible for developing and monetizing tools within Meta's AI portfolio that are catered specifically to businesses.
- An example of that type of product is Meta's new business AI chatbot, which allows businesses to set up their own AI chatbots to talk to their customers and facilitate transactions in WhatsApp and Messenger.
Between the lines: Shih, who also founded the AI-driven sales social network Hearsay Social, will not only be responsible for building new tools, but also for getting businesses to adopt them.
- In an earnings call last month, Mark Zuckerberg said businesses that adopt its AI tools for advertising perform better.
- "We estimate that businesses using Image Generation [an AI-driven ad creation tool] are seeing a 7% increase in conversions — and we believe that there is a lot more upside here," he said.
What they're saying: Asked for comment, a Meta spokesperson confirmed it was creating the new business unit.
- Shih confirmed her new role as VP of business AI at Meta. She said Meta's vision for the new product group "is to make cutting-edge AI accessible to every business." She noted that the businesses that want to harness AI "often don't know where to begin."
What's next: Most of Meta's business-facing AI innovations have so far centered around ad creation and optimization. The new product group will build tools that create deeper customer relationships beyond advertising.
3. Training data
- Microsoft has reportedly inked a deal with HarperCollins to train its AI systems on nonfiction books from the publisher's collection. Authors can opt in or out. (Bloomberg)
- The maker of Pokémon Go says it used data collected from users to create an AI model that can potentially map and interact with the whole world. (Garbage Day, 404 Media)
- Google Gemini now has a memory feature that will store your interests and preferences for more tailored responses. Google says you can view and edit the stored information and see how it's used. (TechCrunch)
- Meta is planning to build a massive new data center in northern Louisiana. (Axios Pro)
4. + This
A vinyl recording from a 1966 wedding, found in a Texas thrift store, was returned to the couple.
Thanks to Megan Morrone and Scott Rosenberg for editing this newsletter and to Caitlin Wolper for copy editing it.
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