A growing number of Wall Street analysts have issued warnings about a possible breakup of Google as the tech giant tries to evade a pair of major federal antitrust lawsuits that could devastate its business model.
The Justice Department is seeking a forced sale of Google’s digital advertising business in an antitrust case that began last week in a federal court in Virginia. Separately, a federal judge will consider a possible breakup after ruling last month that Google operates an illegal monopoly over the online search market.
While the final outcome in both cases is likely years away, research notes compiled by The Wall Street Journal suggest that some analysts expect a negative outcome for Google.
Bernstein analyst Mark Schmulik said it was “hard to imagine Google escaping the battles unscathed.” Mark Mahaney of Evercore ISI said his firm is “more cautious on Google stock” because of what he described as a period of “significant uncertainty” in the near term.
The digital advertising case, in which the Justice Department alleges that Google siphons off more than a third of every dollar spent on its advertising platforms, will be a “tough trial for Google to win,” according to a Sept. 9 note by Justin Patterson of KeyBanc Capital cited by the Journal.
Google could lose 1% to 2% of its projected 2025 profit if it is forced to sell its advertising technology businesses, according to Patterson’s estimates.
The Post has reached out to Google for comment.
Google shares have fallen about 14% since the company’s current financial quarter began on July 1. By comparison, shares of Microsoft and Amazon — two other big tech companies facing antitrust scrutiny — have each fallen about 4% over the same period.
In the adtech case, the Justice Department argues that at a minimum, Google should be required to sell its Ad Manager marketplace.
The feds allege that Google operates a “trilogy of monopolies” in digital advertising by controlling Ad Manager, which links advertisers to online publishers, as well as the products used on the buy and sell side of most advertising deals.
The court heard damning testimony last week, including details about an internal document in which a Google executive boasted in 2009 that the company’s goal was to “crush” rivals in digital advertising.
In the online search case, Judge Amit Mehta said earlier this month that he plans to decide on punishment for Google in August 2025.
Justice Department lawyers are expected to press Mehta to order Google to sell assets that fueled its search monopoly, such as its Android operating system and Chrome web browser.
Other options include preventing Google from paying billions of dollars to partner companies like Apple and AT&T to ensure its search engine is enabled by default on most smartphones.
Mehta determined that the payments were anti-competitive and stifled competition against Google’s search engine.
