Does Google Need to Be Broken Up?

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For years we've heard that regulators may one day take antitrust action against Google (Nasdaq: GOOG  ) . Well, the wait is over. The Federal Trade Commission last week opened a formal probe into the search king's business.

Google Fellow Amit Singhal wrote in a blog post that it remains "unclear exactly what the FTC's concerns are," but The Wall Street Journal talked to a number of unnamed sources who say the FTC is checking to see if Google is abusing its dominance in Internet search and search advertising.

Surely we'll get more details in the coming weeks. In the meantime, investors have a few curiosities to consider:

  • The probe comes a little more than a year after the FTC cleared the way for Google to acquire AdMob, a leading platform for delivering ads to mobile phones and the primary alternative to Apple's (Nasdaq: AAPL  ) iAd service.
  • Microsoft (Nasdaq: MSFT  ) and Yahoo! (Nasdaq: YHOO  ) are developing a formidable Google competitor in Bing. In March, the two combined to serve roughly 30% of the country's searches while buddying up to Facebook for social search.
  • And Facebook, now apparently on track to go public next year at a $100 billion valuation, is working on a platform that eliminates the need for a distinct operating system for delivering apps. That's as much a threat to Android as it is to Apple's iOS.

Will the FTC take these factors into consideration when evaluating whether Google is abusing its power as the leading search engine? What else should regulators consider? We're asking you. Please vote in the poll below and then leave a comment to tell us what you think about the FTC's probe and Google's market position.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Yahoo!, Apple, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Yahoo!, Microsoft, Google, and Apple, as well as creating a bull call spread position in Apple and a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On June 27, 2011, at 6:46 PM, onlymeworld wrote:

    Between Google and Facebook they continue to violate their users privacy rights! All this information they've been able to collect about their users in their databases, along with facial recognition software, etc., is very dangerous! That's why ONLYMEWORLD the new alternative to Facebook has seen triple digit growth over the past few months!

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