Google has lost two important antitrust cases in the past year. Its search business is threatened and its stock is stalled. Federal prosecutors are pushing for it to divest various businesses. Unless the company can pull off a few miracles in court, it will be forced to shrink.
There’s another possibility. Instead of resisting change, Google could accelerate it. It could spin off huge chunks of itself into independent entities.
That would be a very Silicon Valley power move: Break yourself up before courts can break you up. In an era when Big Tech is under suspicion, a maneuver like this would probably be applauded across the political spectrum. For a company that used to have the motto “Don’t be evil,” such redemption might be irresistible.
The Department of Justice wants Google to sell its Chrome browser and its ad network, and maybe its Android mobile business, to fix its monopoly problems. But Gil Luria, a technology analyst with D.A. Davidson & Co., an investment firm based in Montana with $6 billion under management, is thinking bigger. Much bigger.
He published a research note on May 12 saying Google had become a conglomerate. This was not a compliment. He meant that Google offered an array of products and services that often have little relationship to each other, including the Waymo self-driving taxi service, YouTube, a cloud storage business, a search firm and an ad network, among other things.
Google’s $2 trillion stock market valuation is driven by search advertising, which generates more than half of its revenues. Search is also the part of the company under the most pressure as artificial intelligence begins to answer queries. Google searches in Apple’s Safari browser fell for the first time ever in April. That’s one big reason Google shares are down more than 9 percent this year.
