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Sundar Pichai, chief executive officer of Alphabet Inc., during a visit to the Google for Startups campus in Warsaw, Poland, on Thursday, Feb. 13, 2025. The EU has established a reputation globally for its aggressive regulation of major technology companies, including the likes of Apple and Google over antitrust concerns. Photographer: Damian Lemanski/Bloomberg via Getty Images Damian Lemanski | Bloomberg | Getty Images
Perplexity AI's bid on Tuesday to buy Google's Chrome browser for $34.5 billion represents a dramatic moment for the internet search giant, a week before it celebrates the 20th anniversary of its IPO. Even if analysts aren't taking the offer very seriously, Perplexity's move marks a turning point. It's the first time an outside party has made such a public and specific effort to strip out a key piece of Google, which is currently awaiting a judge's decision on whether it must take significant divestiture steps following a ruling last year that the company has held a monopoly in its core search market. The ruling was widely viewed as the most important antitrust decision in the tech industry since the case against Microsoft more than two decades ago. The U.S. Department of Justice, which filed the landmark case against Google in 2020, indicated after its victory in court that it was considering a possible breakup of Google as an antitrust remedy. Soon after that, the DOJ explicitly called for Google to divest Chrome to create a more equal playing field for search competitors. As is, Google bundles search and other services into Chrome and preinstalls the browser on Chromebooks. Google Legal Chief Kent Walker said in response to the DOJ that its "approach would result in unprecedented government overreach" and would harm the country's effort to maintain economic and tech leadership. With the remedies decision expected this month, investors have a lot to consider regarding the future value of Google and parent Alphabet. The company is shelling out tens of billions of dollars a year on artificial intelligence infrastructure and AI services while facing the risk that consumers will be spending a lot less time on traditional search as ChatGPT and other AI-powered alternatives provide new ways to access information. But while Alphabet still counts on search-related ads for the majority of its revenue, the company has been diversifying over the past decade. October will mark 10 years since the creation of Alphabet as a holding company, with Google as its prime subsidiary. "This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google," co-founder Larry Page said in a blog post at the time. Page moved from CEO of Google to become chief executive of Alphabet, promoting Sundar Pichai, who had been a senior vice president in charge of internet businesses, to run Google. Four years later, Pichai replaced page as Alphabet CEO. On Pichai's watch, Alphabet's market cap has jumped more than 150% to $2.5 trillion. With an increasingly dominant position on the internet, Pichai and team have had to continue looking for growth areas, particularly in AI, while simultaneously fending off an aggressive set of regulators in the U.S. and Europe. Analysts have taken the opportunity to place estimated values on Alphabet's various businesses, partly in the event that the company is ever forced into drastic measures. Some have even suggested it could be a good thing for shareholders. "We believe the only way forward for Alphabet is a complete breakup that would allow investors to own the business they actually want," analysts at D.A. Davidson have written in a series of notes this year. Alphabet didn't respond to a request for comment. Here's a breakdown of how some analysts value Alphabet's top non-search assets:
Chrome
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The browser is key to Alphabet's ad business, which uses data from Chrome to help with targeted advertisements. Google originally launched Chrome in 2008 as an effort to "add value for users and, at the same time, help drive innovation on the web." Perplexity's offer doesn't stack up to analyst estimates, but it's still much higher than Perplexity's own valuation, which reached $18 billion in July. Perplexity, which is best known for its AI-powered search engine that gives users simple answers to inquiries, said investors are on board to foot the bill. However, the company didn't name the prospective backers. Barclays analysts called the possibility of a Chrome divestiture a "black swan" risk, warning of a potential 15% to 25% drop in Alphabet's stock should it occur. They estimate that Chrome drives around 35% of Google's search revenue. If a deal for Chrome is on the table, analysts at Raymond James value the browser at $50 billion, based on 2.25 billion users and Google's revenue share agreements with phone manufacturers that preinstall Chrome on devices. That's inline with where Gabriel Weinberg, CEO of rival search company DuckDuckGo, values Chrome. Weinberg, who testified in the antitrust trial, said in April that Chrome could be sold for up to $50 billion if a spinout was required. Weinberg said his estimate was based on "back-of-the-envelope" math, looking at Chrome's user base. Bob O'Donnell of market research firm TECHnalysis Research, cautioned that Chrome is "not directly monetizable," because it serves as a gateway and that it's "not clear how you measure that from a pure revenue-generating perspective."
Google Cloud
A person takes a photo of the Google Cloud logo, during the 2025 Mobile World Congress (MWC) in Barcelona, Spain, March 4, 2025. Albert Gea | Reuters
Google's cloud unit, which is third in the cloud infrastructure market behind Amazon Web Services and Microsoft Azure, is one of Alphabet's key growth engines and its biggest business outside of digital advertising. Google began its big push into the market about a decade ago, even though it officially launched what was called the Google Cloud Platform (GCP) in 2011. The unit was rebranded as just Google Cloud in 2016. Like AWS and Azure, Google Cloud generates revenue from businesses ranging from startups to large enterprises that run workloads on the company's servers. Additionally, customers pay for products like Google Workspace, the company's suite of productivity apps and collaboration tools. In 2020, Google began breaking out its cloud business in financial statements, starting with revenue. In the fourth quarter of 2020, the first time Google included profit metrics for the unit, it recorded an operating loss of $1.24 billion. The business turned profitable in 2023, and is now generating healthy margins. In the second quarter of 2025, Google reported an operating profit for the cloud business of $2.8 billion on revenue of $13.6 billion. Demand is so high that the company's cloud services now have a backlog, a measure of future committed revenue, of $106 billion, CFO Anat Ashkenazi said on the earnings call. In March, Google agreed to acquire cloud security vendor Wiz for $32 billion, the company's largest deal ever. Analysts at Wedbush Securities value Google's cloud at $602 billion, while TD Cowen in May put the number at about $549 billion. For Raymond James, the valuation is $579 billion. D.A. Davidson analysts, who have the highest ascribed valuation at $682 billion, and TD Cowen analysts note that while Google still trails AWS and Azure, it's growing faster than Amazon's cloud business and has the potential for a premium valuation. That's based on its AI infrastructure, strong data analytics stack, and ability to capture more enterprise business. It would be "one of the best standalone software stocks," D.A. Davidson analysts wrote in July.
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