Sunday, June 11, 2017

"Why EU Monopoly Search Ruling Will Be a Tipping Point for Alphabet-Google" (GOOG)

This seems as though it could be a big deal.

From the Precursor blog:
The expected guilty EU antitrust verdict against Alphabet-Google’s flagship “general search service” for abusing its dominance, will be a tipping point for Alphabet-Google this summer. It will effectively divide Google’s history into the two-decade-long, Google pre-monopoly-enforcement era, from the impending Google monopoly-enforcement era, that will likely last a decade plus, if the only plausible proxy, Microsoft, is any indicator.

For the last decade overall, and the last seven years in the EU, Google, its lawyers and PR team have masterfully delayed this inflection point from becoming a reality. Their delay tactics bought the company invaluable time as a business to broadly extend, entrench, and consolidate its massive monopolization across several of the most crucial functions of the Internet ecosystem.
As a stock, the delays have helped to fortify the company’s financial resilience with the Alphabet restructuring, and with Alphabet-CFO Ms. Ruth Porat’s sage belt-tightening and skilled investor whispering, which has been instrumental in helping increase Google’s stock 87% in her two years in the job.

What most don’t appreciate here is how the creation of the Alphabet corporate structure affords Google the capability and convenience to more easily break itself up to unlock value to deflect and minimize the impending stock risk if an EU antitrust remedy involves, or signals a future structural component.

As a news story, Google purposefully has taken by far the lowest extended public profile I have seen since the company went public in 2004.

Google obviously appreciates that it unilaterally can greatly minimize any viral nature of any negative Google news by starving the upcoming EU-Google-antitrust-fire of oxygen of its public attention, by commenting minimally publicly or with “no comment.” This lessens news interest in the event, at the time, and in total, which in turn effectively demotes the algorithmic ranking of news stories on the topic, much more than if the antitrust action was taken against any company other than the world’s info-opoly.

Anyone that tracks Google closely knows that Google News’ coverage of Google itself has plummeted relatively during this period, from being the legendary, self-promoting, amplifier of all new, cool, and 10x innovative, things Google, to Google seldom even showing up as a named technology category of news. This is a great side benefit of being: the world’s only aggregator and ranker of the top 75,000 news sources in Google News with one billion readers; the world’s TV with a billion plus viewers; and also being the world’s info-opoly – where the masses access to the world’s information… is power.

It is clear from these clever preparations that Alphabet CEO Larry Page knows this historic Google-antitrust inflection point is coming.

Why and how will this expected historic EC DG-Comp decision herald a new future for Alphabet-Google and the Internet ecosystem?

A lot will change....