On this week's Rule Breakers podcast, Motley Fool co-founder David Gardner answers a question from... himself. He's seeing a growing sentiment among people who believe that the big three internet powerhouses -- Alphabet (GOOG +0.27%) (GOOGL +0.20%), Facebook (FB 0.52%), and Amazon (AMZN +1.25%) -- hold too much sway over online advertising and other aspects of our e-lives. If monopolies are "bad," is it time to do something about this one? Well, first things first -- it's not a monopoly. And second... well, let's just have David say it in his own words.
A full transcript follows the video.
This video was recorded on Oct. 25, 2017.
David Gardner: Mailbag Item No. 9: This one comes from David G. It's very short and very sweet. David writes, "Hey, David. Should we break up Facebook? Should we break up Amazon? I'm reading this some in the headlines these days."
Well, thanks, and yes, this is one of those questions that I've written to myself because I wanted to speak to it on this week's Mailbag. I'm seeing quite a lot of talk these days about the idea that we should break up these big internet giants, and I do feel like I want to speak to this very briefly.
In fact I'm reading a headline from a USA Today opinion piece this week that said, "Break up the Google-Facebook-Amazon web monopoly," which makes me smile a little bit because that was three companies and the word monopoly was used, which sounds like it should just be one to me.
But a few things. First of all, I generally don't want us to mess with companies that are doing (and I'm going to say this word) great. Not just good -- great things in the world. I think that Facebook has 2 billion people using it because what it's done is great over the last 10 years, and I think the same thing is true of Amazon over the last 20, and I think that Google and Alphabet, these are great companies.
These are not companies that are typically mis serving their customers. In fact the reason, at the heart of it, that they're so successful is because they're doing so well by their customers. So I'm not a big fan of thinking that just because something is big or powerful that it should be broken up.
I say they're winning for all their stakeholders. We're shareholders in these companies, as well as pleased customers. I think the people who don't like them are often their competitors, and I realize that's a dynamic of the political world that can happen where you start saying, "Well, break them up because we can't compete with them."
But so long as I see something doing really good stuff in this world, I realize every company is faulty. They have some faults, but these things are becoming almost universal services in some ways, and I realize that sounds like maybe we should break them up, but for that reason and a couple of others I'm about to give you I'm not a big fan of that.
The second thing I want to say is that there's this thing called the stock market, and at the stock market no one need feel disenfranchised, because feel free to become a part owner, if you like, so that as these companies prosper, it will be your company that's prospering. You can, too. You can even short that company through the stock market, instead, because if you find a poor company doing, let's say, unsustainable or maybe even fraudulent work out there in this world; well, as that company fails, then you will prosper, too. So the beauty of public companies is that we can all be part owners of them. We need not feel as if they are in some way harming us.
And then finally, I do want to put in a word for a global viewpoint, because I think ultimately one of the most harmful things that we can do (this is me speaking to my fellow Americans) to really harm American competitiveness worldwide would be for us to start saying, "Hey, let's break up the best performers, the most successful and effective performers of capitalism that we have in this country. Let's break them up."
I was at a meeting of CEOs earlier this week, and one of them who works in the software industry said, "You know, if you're China, you are rooting on this kind of thing really hard. You might even be backing politicians or sentiment that advocates this sort of thing. Break up Google. Break up Facebook. Break up Amazon. Because if you can disrupt America's greatest contributions to global capitalism, then that fractionalization can really help your own competitiveness. So I think sometimes we need to step away from it and take the big view. That's where I am. Thanks for your question, David G.
