How to Break Up Google
The Justice Department is pursuing its case against Google’s dominance in the ad market, citing two key factors. Firstly, Google exerts excessive control over search engine ads. Secondly, it acts as an agent for a significant portion of the interest’s…
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The Justice Department is pursuing its case against Google’s dominance in the ad market, citing two key factors. Firstly, Google exerts excessive control over search engine ads. Secondly, it acts as an agent for a significant portion of the interest’s advertising, a broker’s role known as “ad tech.” Google’s ownership of this part of online marketing is so comprehensive that it has no real competition, effectively placing it in a class of its own.
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The easiest and most direct way to solve the Justice Department’s complaint would be for Google to establish a new ad tech company that has a distinct ownership structure, management team, and no affiliation with the search engine division. However, Google argues that this measure is unnecessary. According to The Wall Street Journal, Dan Taylor, Alphabet’s vice president of global advertising, said, “As we’ve said, this lawsuit ignores the reality of today’s dynamic digital-advertising space, where we compete against hundreds of companies like Amazon, Apple, Meta, Microsoft and TikTok.” (These are America’s most hated companies.)
Taylor has a point, but is it strong enough? Google has about 28% of the online ad market in the U.S. Facebook has 20%. In each case, the number is falling. As Amazon’s most recent earnings show, its ad business is booming. Amazon is expected to have 13% of the market next year. Meta’s share is forecast to drop to 18%.
However, there is a distinction between market share in search and ad tech. The Justice Department is wary of combining two dominant services and may struggle to prove that the connection between the two provides Google with a significant edge. The Justice Department’s argument will likely include the fact that Meta and Amazon lack robust ad tech businesses, making their cases distinct from Google’s.
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The Justice Department’s charge is true. Google holds two pole positions. That is easy to solve with a breakup. However, it dodges the question of whether the prowess of the two businesses in Google’s hands is enough for a breakup to matter. (These are the industries laying off the most workers.)
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
