A Busted Up Google
We analyze Google's potential value in the event of a forced anti-trust breakup of the company.
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"Google is a monopolist, and it has acted as one to maintain its monopoly" – U.S. District Judge Amit Mehta, Washington, D.C.
The recent anti-trust ruling from a U.S. District Court judge has brought into question whether Google (we have owned Google since its IPO and continue to use Google synonymously with the name of its parent company, Alphabet, which was up there with the worst company name-changes in history) is truly a monopoly, and now the U.S. Government is considering breaking up Google as a result of the judge's decision.
We have serious (and I mean serious) doubts that the U.S. Justice Department will actually seek to break up Google and even if they do, that the DOJ will be successful in its attempt to break up Google (a remedy that will surely be litigated before SCOTUS if it is sought).
The DOJ has a horrible track record of successfully enforcing antitrust law, to say the least. In our view, the more likely scenario (if Google ultimately loses this case) is that the Government forces Google to spin off a specific division (like Android, AdWords, or Chrome) rather than force a total breakup of Google into all of its component parts.
That being said, we wanted to analyze how a Google breakup would impact Google shareholders.
