Privacy concerns aside, a bigger problem for me was the declining quality of the overall search experience. Search engines had become overly commercialised, cluttered with far too many ads, and just weren’t delivering the information I wanted.
Initially, I switched to DuckDuckGo, the privacy-focused niche search engine that does not track our personal data or browsing history. While it does make money from advertising, the ads that we see on DuckDuckGo are based on the context of the search query itself. As artificial intelligence (AI) chatbots such as OpenAI’s ChatGPT, Anthropic’s Claude and xAI’s Grok, Google’s own Gemini, and AI-driven search engines like Perplexity began to offer a viable alternative, I tried them as well. AI chatbots are now the first thing I use to find information. As a journalist, I also like the fact that Perplexity recently began sharing search revenue with publishers and media firms.
While there are free tiers for most of the AI chatbots, I now subscribe to ChatGPT and Claude, paying US$20 ($25.80) a month in subscription fees. Although I was initially concerned with the accuracy of information, my experience with AI chatbots has been good so far. I have tried “Deep Research”, an agentic capability that helps me do multi-step research across the internet.
I am hoping the business model of AI chatbots will evolve to provide a far more user-friendly and less ad-cluttered service than traditional search engines, without relying on constantly tracking my data and retaining all my browsing history to boost ad revenues. It isn’t just the AI chatbots that are transforming the internet search engine business.
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Regulators are finally doing their job as well. A federal antitrust case brought by the US Department of Justice against Google in early 2023, in which the search giant is accused of illegally monopolising the advertising technology market in violation of the Sherman Antitrust Act of 1890, is drawing to a close this month. Federal judge Amit Mehta will, over the next week, rule whether to force Google to sell its browser following his court ruling last year that found the Alphabet subsidiary had illegally monopolised the search engine market.
Underdogs are already in overdrive. Earlier this month, Aravind Srinivas, 31, co-founder and CEO of Perplexity AI, a fledgling AI-driven search engine, made an audacious and unsolicited US$34.5 billion all-cash bid for Google Chrome, the world’s most used web browser with 3.5 billion monthly users, as a way of reaching more consumers.
Though Perplexity, which just last month raised US$100 million at a US$18 billion valuation, is offering almost twice as much cash than its own worth, the reality is that the upstart Google challenger is backed by a bunch of hugely resourceful people and corporate entities, including e-commerce behemoth Amazon.com’s founder Jeff Bezos (net worth US$252 billion), AI chip giant Nvidia Corp, former Google chairman and CEO Eric Schmidt (net worth US$38.8 billion), venture capital firm New Enterprise Associates and Japanese tech-focused investment holding firm SoftBank Group.
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It is not uncommon for a smaller tech start-up to bid for a company that is worth twice as much. Such transactions often involve a share swap, so effectively the larger company’s shareholders end up controlling the combined entity. Yet, since Google is being forced to sell Chrome, a share swap between Perplexity and Chrome shareholders would only mean Alphabet’s shareholders owning most of the Perplexity-Chrome combo. That’s why Perplexity is offering cash. Presumably, its big backers have assured the board that they will be happy to fund the acquisition as it will make the firm a frontrunner in not just the search business but also AI.
Detractors say the bid is just a publicity stunt; Chrome is not even for sale. For its part, Perplexity has been at pains to stress that its bid for Chrome is a “commitment to the open web, user choice and continuity”. The upstart has also pledged to invest US$3 billion into the open-source Chromium project over the next two years and guaranteed 100 months of support for Chrome users. Perplexity, which recently launched its own browser, Comet, has been knocking on the doors of other smaller browser firms, including The Browser Co, Brave and DuckDuckGo, to help build on its own nascent effort, but made no headway in any of those approaches, according to The Information. Indeed, Perplexity began approaching smaller browser firms after it heard that rivals such as OpenAI and Anthropic were kicking tyres at a few browser firms.
CEO Srinivas argues that Perplexity needs to buy a browser because it will be a valuable context for Perplexity’s search engine by providing it with information on what tabs users have open and on their browser activity. The acquisition, if it does go through, would allow Perplexity to leapfrog the world’s most valuable AI start-up and ChatGPT creator OpenAI, as well as other AI start-ups, Anthropic and Elon Musk’s xAI, in what is seen as a land grab.
Just days after Perplexity’s unsolicited bid, generative AI platform Search.com, a division of Public Good, made its own US$35 billion counter-offer for Chrome, US$500 million more than what Perplexity is willing to pay. Moreover, while Perplexity did not reveal that it had money lined up, Search.com’s bid is reportedly being funded by banking giant JPMorgan. So, what is Chrome really worth? DuckDuckGo’s founder, Gabriel Weinberg, at Google’s antitrust trial earlier this year, testified that Chrome was probably worth US$50 billion. Colin Sebastian, internet analyst at Wall Street brokerage Robert W Baird & Co, believes the value is probably closer to US$100 billion.
For its part, Alphabet executives have been arguing that a forced sale of Chrome would only destroy its value and utility to the public. In a blog post three months ago, Google argued that a divestiture “would break” the browser, rendering it “insecure and obsolete”. It noted “a wide range of voices agreed that it would do more harm than good”, without saying who exactly they were.
Search dominance
Here’s why Chrome is such an important cog in the wheel of search dominance: It has a commanding 67% share of the global browser market compared with 16% for Apple’s Safari, 5% for Microsoft Edge and 2.5% for Firefox, according to StatsCounter. In the US, where 55% of smartphone users own an iPhone, Chrome has just under 50% share of the market, while Safari has about a third and Microsoft Edge has a 7% share because of Apple’s smaller 32% footprint in the laptop segment and 23% in the desktop market. In Asia, where iPhone penetration is low, Chrome has a 72% share of the market. In China, while Chrome and Safari combined still have close to half of the total market, local players, such as Alibaba’s UC browser, Xiaomi’s Mi browser, as well as the Baidu browser and Huawei browser, have been gaining market share.
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The face of Perplexity is media-savvy Chennai-born electrical engineer Srinivas, who arrived in the US to pursue a PhD in Computer Science at the University of California, Berkeley. Srinivas held research positions at OpenAI, GoogleBrain and Google DeepMind, focusing on machine learning and AI while he was still a PhD student. In 2022, just eight months after his graduation, the then 27-year-old Srinivas co-founded Perplexity with Denis Yarats, an AI researcher with experience at Facebook; Johnny Ho, a former engineer at Quora; and Andy Konwinski, a co-founder of Databricks Inc, a global data and AI platform. Perplexity developed an AI-powered “answer engine” designed to provide direct, cited responses to user queries, seeking to distinguish itself from traditional search engines like Google.
Think of Perplexity as an AI-powered search engine that provides answers to your questions in a conversational format, rather than just listing links like traditional search engines. If you ask a question, instead of sifting through multiple web pages, you will receive a clear, concise answer that includes sources for further reading. If you ask it about the best travel destinations in Southeast Asia, Perplexity will pull information from various sources, including travel guides, summarise it, and then present it in a way that is easy to understand — all while giving credit to the original sources.
By providing summarised answers to users’ queries with links to the source information, Perplexity catapulted to become one of the world’s fastest-growing AI chatbots. It had 22 million monthly active users at the end of December and expects to double that number this year. Until Perplexity arrived on the scene, nobody paid for search. But Perplexity was doing it so well that customers were eager to sign up for the paid option. It had over 260,000 paying individual subscribers at the end of last year and expects to dramatically increase its total paid user base this year.
While most users still access Perplexity for free, individuals can pay US$20 a month for more queries, a choice of the AI models that underpin the answers, and use of its shopping agent. Business customers pay US$40 per month per employee. Business Insider recently reported Perplexity’s annualised revenue has surged to over US$150 million recently from US$50 million in November. It has also introduced a bunch of new products, including an application programming interface that enables customers to incorporate Perplexity’s search capabilities into their own products, e-commerce capabilities and its Comet browser.
Perplexity’s acquisition spree
Srinivas has also made a number of acquisitions to grow the company at this early stage instead of relying on just organic growth like many early start-ups. Among its early purchases was Sidekick, a small firm that makes a distraction-free browser. It also bought Carbon, which connects external data with large language models. Earlier this month, Perplexity acquired Invisible, a start-up building infrastructure for AI agents.
While rivals like OpenAI, Anthropic and others are still talking about hardware, Perplexity recently sealed a partnership with Deutsche Telekom to expand its applications into an AI-integrated smartphone. Perplexity’s chief business officer, Dmitry Shevelenko, testified at Google’s antitrust trial that the search giant’s distribution contracts were preventing it from signing deals with smartphone makers as well as carriers to become the default AI assistant on the phone. It has struck deals to install the Perplexity app on Motorola phones and with Samsung to give customers a year’s free access to Perplexity Pro.
Apple and Perplexity have reportedly talked about a collaboration. Dan Ives, Wedbush Securities’ top tech analyst, last month urged Apple to buy Perplexity. Ives noted that even though Apple boasts “the most entrenched consumer installed base in the world with 2.4 billion iOS devices and 1.5 billion iPhones”, it is still falling behind in the AI race. Apple is due to unveil its new lineup of iPhones on Sept 9 and a new AI-enabled Siri software early next year. It is reportedly collaborating with both OpenAI and Google on its AI offerings, but Ives believes buying a smaller AI start-up like Perplexity might be a much better idea. Whatever happens, users like me are unlikely to go back to traditional search engines anytime soon.
Assif Shameen is a technology and business writer based in North America
