# Gene Munster Discusses Potential Consequences of DOJ's Actions Against Google

Deepwater Asset Management's managing partner Gene Munster has provided insights into the potential fallout from Alphabet Inc.’s regulatory challenges, particularly the possible divestiture of Google's Chrome browser.

During an interview with CNBC on Thursday, Munster emphasized the significant impact a Chrome spin-off could have on Google's search market share. He indicated that a separation of Chrome from Alphabet could lead to a reduction in Google's search market share in developed regions from its current 90% to around 80%. Such a decrease could sharply affect Google's search growth, which has been between 10-14% in recent quarters, potentially shrinking to low single digits or even turning negative in the short term.

Munster noted, "People love Google, and they will slowly come back," highlighting the resilience of Google's user base. However, he also pointed out the immediate ramifications, with the company’s stock down by approximately 5% as this issue goes to the "core of half their business, which is search." Although he considers the actual likelihood of a Chrome spinout to be low due to a lack of precedent, the concern remains significant.

Moreover, Munster remarked on the crucial role Google’s search business plays in its overall revenue and its importance to their AI initiatives like Gemini. A decrease in search market share could weaken Google's position against competitors such as OpenAI’s ChatGPT.

He further mentioned the interconnected nature of Google’s regulatory issues, including the DOJ’s examination of Google's search agreement with Apple Inc. It was revealed earlier this year that Apple received approximately $20 billion in 2022 to position Google as the default search engine on Safari for iPhones.

For investors, the stakes are substantial. Munster warned of potential further declines in Google's stock value by an additional 10-15% if these worst-case scenarios materialize.

The DOJ’s active measures to break up Google’s search monopoly, including the demand to divest Chrome, are part of a broader strategy to foster competition in the search market. The DOJ has also suggested that Google may need to sell its Android operating system if other measures are unsuccessful. These legal proceedings have significantly impacted Alphabet's market value, resulting in a drop of over $120 billion on Thursday—the steepest decline since January.

In response to these developments, notable industry figures speculate on possible acquisitions or alternatives. Perplexity AI’s CEO has expressed interest in acquiring Chrome, while OpenAI is contemplating the development of its web browser to challenge Google's dominant position.

On Thursday, Alphabet's Class A shares saw a decline of 4.74%, closing at $167.63, while Class C shares fell by 4.56%, ending at $169.24. Further after-hours trading data showed a continued decrease, with Class A shares dropping an additional 0.42% to $166.93 and Class C shares declining 0.38% to close at $168.59, according to Benzinga Pro.