Tech company Apple (AAPL) is stepping in to support search engine giant Google (GOOGL) in its ongoing antitrust trial over online search dominance. At the center of the case is the lucrative Apple and Google agreement, which reportedly earns Apple around $20 billion annually for making Google the default search engine on Safari. The Department of Justice (DOJ) argues that such exclusive contracts help Google monopolize the search market.
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In addition, it claims that Google’s dominance hurts competition and has proposed forcing Google to sell its Chrome browser. Interestingly, although the DOJ wants more competition, Apple claims that is just does not have any interest in building its own search engine. Developing a search engine from scratch is costly and time-consuming, and Apple sees greater value in maintaining its current arrangement with Google, which provides substantial annual revenue with little effort.
Nevertheless, Google has offered to modify its agreements with partners by making them shorter and non-exclusive, which would allow for more freedom to choose alternative search engines.
Google Already Faces Rising Competition
Although Google currently dominates the search engine market, it is already facing increasing competition. Indeed, Microsoft-backed OpenAI (MSFT) recently made its ChatGPT Search feature free for all users. Other competitors like Perplexity have also been growing in popularity over the past year. As a result, this seems to have impacted Google’s website traffic over the past year. In fact, total visits are down 22.81% when compared to the same quarter in 2023.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 25 Buys and six Holds assigned in the past three months. After a 37% year-to-date gain, the average GOOGL price target of $212.11 per share implies 10.5% upside potential from current levels.
