Alphabet loses $55 billion in market value after Samsung reportedly considers replacing Google with Bing in its phones

• Alphabet erased $55 billion in market value on Monday after a report said competition is heating up in the search market.
• According to the NYT, Samsung may replace Google with Microsoft's Bing as the default search engine in its phones.
• Such a move would put about $3 billion in revenue at risk for Alphabet, which has long faced little competition.

Alphabet stock slid as much as 4% on Monday, erasing about $55 billion in market value after a report from The New York Times suggested that competition is heating up in the mobile search market.

The report said that Samsung is considering replacing Google as the default search engine across its lineup of devices in favor of Microsoft's Bing Search, which could put about $3 billion in annual revenue at risk for Alphabet.

A similar contract between Alphabet and Apple, which is worth about $20 billion in annual revenue to Alphabet, is due for renewal later this year.

Google employees were shocked when they learned in March that Samsung was considering replacing Google, and internal messages of Alphabet employees reviewed by The New York Times showed "panic" among staff.

Google has been facing increased competition in search for the first time in decades after Microsoft incorporated OpenAI's ChatGPT into its Bing search results earlier this year. Google has long held an essential monopoly on the search market, commanding a market share of about 90%.

And Alphabet is working hard to defend its market share, according to the report, with a team of more than 160 people working to incorporate artificial intelligence features into its Google search product.

But that might not be enough if Samsung decides to set Bing as the default search engine across the hundreds of millions of devices it ships each year. While Google could still be made the primary search engine on Samsung devices if a deal between Samsung and Microsoft goes through, it would require users to change the phone settings on their own to make the change.

Samsung has a long standing relationship with both Alphabet and Microsoft, as it pre-installs various apps from both companies on its devices, and negotiations between Samsung and Microsoft are still ongoing and could still end up with Google as its default provider, according to the report.

But the report highlights just how much is at stake for Alphabet to defend its market share in search and regain its competitiveness in the generative AI search market, at which ChatGPT is thriving. An initial showcase of Google's answer to ChatGPT, dubbed Bard, was a flop.