A growing number of Wall Street analysts have issued warnings about a potential Google split, as the tech giant tries to fend off two major federal antitrust lawsuits that could devastate its business model.
The Justice Department is seeking a forced sale of Google. In an antitrust case that began last week over the digital advertising business in Virginia federal court. Separately, a federal judge will consider a possible breakup after ruling last month that Google Runs an illegal monopoly on the online search market.
Although in both cases the final results may take several years to emerge, this is revealed by the research notes compiled by the researchers. The Wall Street Journal Some analysts are expecting a negative outcome for Google.
Bernstein analyst Mark Shmulik said it was “hard to imagine Google walking away from this battle unscathed.” Evercore ISI's Mark Mahaney said his firm was “more cautious on Google shares” because of what he called “considerable uncertainty” in the near future.
The digital advertising case — in which the Justice Department alleges that Google pockets more than a third of every dollar spent on its ad platforms — “will be a tough test for Google to win,” according to a Sept. 9 note from KeyBanc Capital’s Justin Patterson cited by the Journal.
According to Patterson's estimate, if Google is forced to sell its adtech business, its projected revenue in 2025 could decline by 1% to 2%.
The Post has contacted Google for comment.
Google shares have fallen about 14% since the company's current fiscal quarter began on July 1. By comparison, shares of Microsoft and Amazon — two other big tech companies facing antitrust investigations — have fallen about 4% over the same period.
In the adtech case, the Justice Department is arguing that Google must at least sell its ad manager marketplace.
The federal government alleges that Google operates a “triple monopoly” in digital advertising by controlling Ad Manager, which connects advertisers with online publishers, as well as the products used on the buy and sell side of most ad deals.
Last week the court heard scandalous testimony, including details about an internal document in which a Google executive claimed in 2009 that The company's goal was to “crush” digital advertising rivals.
In the online search case, Judge Amit Mehta said earlier this month that he plans to take a decision on it. Google's punishment till August 2025,
Justice Department lawyers are expected to press Mehta to order Google to sell assets that have helped fuel its search monopoly, such as its Android operating system or Chrome web browser.
Other options include preventing Google from paying billions of dollars to partner companies such as Apple and AT&T to ensure its search engine is enabled by default on most smartphones.
Mehta found that these payments were anti-competitive and suppressed competition against Google's search engine.
