Motley Fool Money: The Future of Google Search
Release Date: March 27, 2025
Hosts: Dylan Lewis, Ricky Mulvey, Mary Long
Guests: Jason Moser, Anthony Chavon

1. Introduction

In this episode of Motley Fool Money, hosts Ricky Mulvey, along with guest Jason Moser and real estate expert Anthony Chavon, delve into a range of pressing topics affecting today's investors. From sudden tariffs impacting the auto industry to Google's struggle against AI competitors, and Robinhood's aggressive market strategies, the discussion provides a comprehensive overview of the current investment landscape.

2. Impact of New Auto Tariffs

The episode opens with a discussion on the looming 25% tariff imposed on cars entering the United States, specifically targeting fully assembled vehicles. At the time of recording (1:50 PM Eastern), major auto manufacturers are experiencing significant stock declines:

• GM: Down 7%
• Ford: Down 3%
• Magna International: Down 7%
• Tesla: Up 6% (Ricky Mulvey, 00:34)

Jason Moser explains the rationale behind the tariffs, highlighting the aim to boost domestic manufacturing. However, he points out the complexities involved:

"There can be thousands of parts that are coming from outside of the country... increased production costs, higher prices for consumers, disruption of supply chains... [it's] a frustrating time for investors."
(00:34 - 02:30)

Moser emphasizes the uncertainty surrounding the tariffs and suggests that management teams should communicate this uncertainty to investors, even if it means withdrawing quarterly guidance.

3. Google's Struggle with AI Competitors

Transitioning to technology, Ricky Mulvey introduces a Bloomberg Businessweek article titled "Google is Searching for an Answer to ChatGPT." The discussion centers on Google's challenges in maintaining its dominance in search as AI tools like ChatGPT and Google Gemini gain popularity.

Key Points:

• Google's search business accounts for about 60% of Alphabet's annual sales (~$200 billion in 2024).
• AI tools are attracting users away from traditional search engines.

Jason Moser compares the evolution of search to an expansion rather than a direct competition:

"It's just ultimately doing more for us, which is great... Google has at least 10 platforms with a billion or more users alone... it's something that Google will have to pay very close attention to."
(07:39 - 08:47)

Google's Strategic Pivot:

• Reassigned over 1,000 engineers (20% of the search engineering team) to focus on generative AI.
• Vision for search includes reduced prominence of the search bar, increased voice and visual search capabilities.

Moser views Google's pivot as necessary to stay competitive, even though incorporating new technologies presents its own set of challenges.

4. Robinhood's Aggressive Expansion and Fee Strategy

The conversation shifts to Robinhood's recent product launch, which includes:

• Robinhood Banking: Enhanced private banking features and more in-depth investing analysis.
• Fee Reduction for Robo Advisors: Caps management fees at $250 per year from the previous 0.25%.

Jason Moser highlights the potential threat to registered investment advisories (RIAs):

"The potential for your RIAs to come under threat with this... they have around 25 million active account holders."
(11:46 - 12:32)

Cash Delivery Service:

Ricky Mulvey critiques Robinhood's new cash delivery service, questioning its practicality and safety:

"I've never needed to have cash delivered to me. This just doesn't sound like a very good idea... the fees seem preposterous."
(13:21 - 14:30)

Everything App Strategy:

Despite skepticism, the hosts acknowledge Robinhood's stock performance, noting that the "everything app" approach is currently successful for them, unlike similar strategies by other companies.

Jason Moser advises caution, emphasizing the importance of focus:

"Ensuring you're delivering what customers want and managing it wisely... it's about balance."
(15:33 - 16:34)

5. Office Space Market Outlook

The latter half of the episode features a detailed analysis of the office real estate market with Anthony Chavon. Referencing a New York Times article titled "Signs of an Office Market Bottom the Worst is Probably Over," Chavon provides insights into current trends:

Key Observations:

• Class A Office Spaces: Likely bottomed out with high occupancy rates (90%+ for companies like BXP and Alexandria Real Estate Equities).
• Overall Office Market: Faces a "slow-moving train wreck" with vacancy rates around 20%.

"The worst is probably over for the best located Class A, highest quality office space... it's going to be more of a slow-moving train wreck."
(18:09 - 19:57)

Challenges for Office Landlords:

• High vacancy rates despite a strong job market.
• Necessity for significant capital investment to renovate older buildings.
• Increasing concessions like free rent or tenant improvements to attract and retain tenants.

Investment Perspective:

Chavon advises investors to be cautious with office REITs, placing them in the "two hard pile," meaning they are high-risk investments not suitable for most retail investors. He specifically mentions Alexandria Real Estate Equities as a more stable option due to its focus on life science tenants and strong balance sheet.

"For office REITs, I would probably lean towards Alexandria Real Estate Equities... their balance sheet is amazing."
(27:08 - 28:13)

6. Conclusion

The episode provides a multifaceted look at current investment challenges and opportunities:

• Auto Industry: Navigating new tariffs requires strategic management and clear communication.
• Tech Sector: Google's adaptation to AI competitors is crucial for maintaining its search dominance.
• Fintech: Robinhood's expansion poses significant competition to traditional financial advisors.
• Real Estate: The office space market remains divided, with high-quality properties faring better than the rest.

The hosts encourage investors to stay informed and cautious, highlighting the importance of understanding the underlying factors driving these industries.

Notable Quotes:

• "There is just so much uncertainty in regard to all of this tariff talk." – Jason Moser (02:30)
• "They have a company in ChatGPT taking eyeballs away from Google properties." – Jason Moser (07:39)
• "The fees seem preposterous, and I was just gonna ask that. It's like you get a service fee, but then on top of that, you probably gotta tip the guy." – Jason Moser (13:21)
• "I think that's something that's just changed the math... So I think the bifurcation between the skilled real estate operators and the, for lack of a better term, not so skilled operators will continue to widen." – Anthony Chavon (22:29)

This comprehensive summary encapsulates the critical discussions from the episode, providing valuable insights for investors navigating the complexities of today's market.