👉 Background: Earlier this year, the US courts ruled that Google illegally maintained a monopoly in online search (alongside its illegal monopoly in ad tech). And this could result in the break-up of some of Google's key divisions.  

👉 What happened: Now, Perplexity, best known for its AI-powered search engine, has lobbed a $34.5 billion USD bid for one of Google’s most valuable products, Google Chrome, in anticipation of a potential breakup of Google. And to make matters worse for Google, it’s just days before Google Chrome’s 20th birthday party.

👉 What else: The experts aren’t exactly betting on the deal going through, but it’s the first formal bid to snatch Chrome away from Google. But for Google, Chrome is so much more than just a search engine because of its synergy value.

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‍What's the key learning?

‍💡The value of a business unit on its own can be very different from its value within a larger company. It’s called ‘synergy value’, which is all about the extra benefit that a parent company gets from owning a specific asset.

💡For Google, Chrome isn’t just a web browser, it’s a funnel that helps feed its search business with user data, ad opportunities, as well as giving it the default market position. That’s why losing Chrome could have an outsized effect on Alphabet’s revenue. In fact, Barclays Bank reckons that the sale of Google Chrome could lead to a 15–25% drop in Alphabet’s share price. In dollar terms, it could wipe between $370 billion - $615 billion USD in Alphabet’s market value - a lot more than the. current offer.

💡Chrome’s internet dominance is so strong that some analysts reckon it drives around 35% of Google’s entire search revenue. So while Perplexity’s offer has made headlines, don’t expect Google to be rushing to sign on the dotted line.