It is one of Silicon Valley’s legendary investments. In 1998, a 34-year-old Jeff Bezos gave $US250,000 ($377,825) to a pair of Stanford University students who had developed a new type of search engine.
At the time, it was a risky bet. Most people browsed the web by using “portals” like Yahoo or by remembering their favourite sites; it was not obvious that searches would be a profitable business.
Google co-founder Sergey Brin is back. Credit: AP
But when Google went public in 2004, Bezos’s stake was worth $US280 million. If he had held on to it, it would now be worth billions.
So in January, when the Amazon founder invested in a company seeking to take Google’s place in the food chain, people sat up and took notice.
Bezos took part in a $US74 million investment in Perplexity, a San Francisco start-up that aims to answer queries with artificial intelligence rather than a list of links.
Type a question into the app – how to roast a chicken – and it will confidently answer with a couple of sentences and a few bullet points, rather than the list of links that made Google famous.
Aravind Srinivas, Perplexity’s chief executive, is yet to meet the world’s richest man: he says the two will be catching up soon. But he is fond of quoting a Bezos-ism: “Your [profit] margin is my opportunity.”
Srinivas is betting that just as Google swept away Yahoo as the once-dominant website rested on its laurels, his company will hasten the downfall of the search engine.