A Google Breakup Could Be Like Old AT&T

By Douglas A. McIntyre Updated Jan 11, 5:29PM EST · Published Sep 23, 8:23AM EDT

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A Google Breakup Could Be Like Old AT&T — © Justin Sullivan / Getty Images

Could Google parent Alphabet Inc (NASDAQ: GOOG) be broken into pieces? Could Facebook Inc (NASDAQ: FB) suffer a similar fate? A look back at the history of tech and telecom companies says the answer is “yes”. The best example is the breakup of AT&T, based on a 1982 court ruling. The action was due to a series of U.S. law suits which went back as far as 1974. Microsoft Corp. (NASDAQ: MSFT) nearly faced a similar challenge in 1999.

Bloomberg reports that The White House may issue an executive order which would trigger a series of antitrust investigations by U.S. government departments and agencies. The basis of the attacks may be that Google controls too much of the search business in the U.S. and uses this to support its Android operating system which supports other products like Google Maps. In Facebook’s case, it is the largest social media network by far and dwarfs competition like Twitter, Inc. (NYSE: TWTR).

Another reason Google and Facebook’s dominance could cause real government scrutiny is that between them they control two-thirds of the U.S. digital ad market. Google’s share is estimated at 37% and Facebook’s at 20% according to research firm eMarketer. The balance of American media which relies on online advertising for their businesses to survive are pressured enough that many have watched their margins disappear and seen the future of their businesses threatened.

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AT&T was broken into seven regional companies and a new AT&T which kept long distance services and the research operations of the old company. A break up of Google could include a spin-off of operations like YouTube, the largest video site in America, Alphabet’s Android operating system which controls over 80% of the market share in its sector, and smaller businesses which include Google Maps and the Chrome web browser.

Does It matter that an investigation of Google and Facebook may happen in 2018 while the AT&T one happened in the late 1970s and 1980s? If the U.S. court system determines that either is a monopoly, then almost certainly not.

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About the Author Douglas A. McIntyre →

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.