Why Alphabet's Investors Should Root for Its Breakup
The recent U.S. District Court ruling that Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) operates as an illegal monopoly in two key segments of the digital advertising market has tremendous implications for the tech company. Since ads are its primary source of revenue, a breakup of the business might seem to bode poorly for the Google parent.Nonetheless, advertising is just one of many businesses under Alphabet's umbrella. If the company broke up, that would put many of its businesses under separate management teams, which could lead to the creation of more shareholder value. Here's why.Alphabet has already indicated that it will appeal the ruling. Thus, a breakup is unlikely in the near future. Also, Alphabet has previously shown that it can be willing to part with businesses. For example, it sold enterprises such as quantum computing company SandboxAQ and supply chain optimization start-up Chorus after concluding they were poor fits for its business model.Continue reading
The recent U.S. District Court ruling that Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) operates as an illegal monopoly in two key segments of the digital advertising market has tremendous implications for the tech company. Since ads are its primary source of revenue, a breakup of the business might seem to bode poorly for the Google parent.
Nonetheless, advertising is just one of many businesses under Alphabet's umbrella. If the company broke up, that would put many of its businesses under separate management teams, which could lead to the creation of more shareholder value. Here's why.
Alphabet has already indicated that it will appeal the ruling. Thus, a breakup is unlikely in the near future. Also, Alphabet has previously shown that it can be willing to part with businesses. For example, it sold enterprises such as quantum computing company SandboxAQ and supply chain optimization start-up Chorus after concluding they were poor fits for its business model.
