Perplexity has its foot on the gas and is going right after Google. (CEO Aravind Srinivas really has no chill.) Whether it’s organic search or soon search advertising, the Gen AI platform has very quickly gained major adoption and is truly challenging Google on its core utility.
(By the way, Gen AI search remains a total black box for brands, but we will leave that piece out of this story for now.)
With that in mind, given OpenAI’s success and the desire for incumbents to dive more deeply into AI, Perplexity could be poised for some sort of courtship with Big Tech. Who makes the most sense for a deal? Could Apple be that buyer? Maybe, according to the adtech community. (Microsoft and Google have no shot.)
“Apple should just buy Perplexity, right?” suggests Shiv Gupta of U of Digital.
Why This Matters:
Remember, Google recently suffered a major legal blow when a federal judge ruled it illegally maintained monopolies in search. The lawsuit accused Google of using exclusive agreements, like its deal with Apple, to uphold its market dominance. They’re not wrong.
Ultimately, the outcome of that is that a Google-Apple deal won’t be allowed again in the future. So what’s the alternative? The DOJ’s victory won’t lead to Apple swapping Google for Bing as its default search engine. That’s not change. The ruling should render these massive corporate partnerships obsolete and push the market toward something better. Or maybe not?
Apple benefits quite a bit from its current arrangement, receiving up to $20 billion annually from Google to remain the default search engine on iOS. Losing Google as a partner strips Apple of significant, easy revenue. It’s uncertain which company might replace Google as the default on iOS.
To that end, could Apple, with no clear payment partner on the horizon, simply develop its own search engine using its war chest of resources? (I’m sure this wasn’t the outcome the Federal intended when taking action against Google.) Alternatively, Apple might consider acquiring an established player like Perplexity. That’s what Gupta is getting at. A possible deal makes a lot of sense on paper.
Experts React:
Ari Paparo agrees with Gupta about buying Perplexity, responding to his tweet with, “Absolutely.”
Our Take:
Perplexity continues to draw interest in the adtech community. It’s a Google adtech embryo right now, which is fascinating. There are a lot of interesting futures here.
Apple has also been shockingly terrible at showcasing real Gen AI ability. It has an impressive tech stack for AI but the end-user value remains limited. Buying Perplexity immediately changes the company’s footing and perception. It also could set it up for more in adtech/advertising in the future, an area that Apple doesn’t talk about much but clearly sees as a growth area.
Last week, Perplexity made headlines with leaked plans to integrate ads into its search experience in Q4, featuring CPM prices exceeding $50.
