It seems that a new war started this month between Alphabet (Google) and Microsoft. Pundits specualte whether Alphabet needs a wartime CEO instead of the current one using analogies from The Godfather, the scene where Michael Corleone explains that they need a wartime consigliere because “things may get though”.
While it may seem that it’s a battle over Artificial Intelligence, this is really a Search Engine War. Search is important for Alphabet because most of its revenue comes from search advertising. Alphabet advertising revenue in 2022 was $224.47 billion from a total revenue of $282.8 billion1, while Microsoft advertising revenue was $11.59 billion from a total revenue of $198 billion2 for the same year.
We may take for granted that the current top-five tech companies will continue to be the biggest companies by market value forever, but history shows otherwise. “With the exception of Warren Buffett’s Berkshire Hathaway, none of the six largest companies by market value in 2017 even existed in 1967; three of them are less than 25 years old.” (Forbes)