The US’s efforts to end Google’s ’empire’ could shoot the value of Alphabet 30%

The United States wants to determine if the most popular Internet search engine in the world, Google, can continue to be the property of one of the Seven magnificent Or if Alphabet, his matrix, will have to face the painful decision to sell the browser of the five colors installed in the vast majority of the world’s electronic devices right now: Chrome.

A few hours ago, in the capital of free world, Washington DC, the doors of the local courts were opened to listen to what the parties have to say: on the one hand, the Government of the tycoon Donald Trump and, in front, the lawyers in charge that one of the pioneers of the internet today stays as it is. A solution hearing – as the open process is called in the legislative jargon – consequence of a judicial ruling that was released in August and that determined what no one wanted to listen to in Silicon Valley: Google operates in a monopoly regime and uses its dominant position in the market for end They are their rivals and limit innovation.

It was then that the attorney general, Merrick Garland, declared that this “victory” on Google was a “historical triumph for the American people” – it does not say that also for the rest of the planet – adding to these words that No company, “however large or influential it is”, is “above the law”.

In a similar direction, the Blanca Democrata of President Joe Biden who in the voice of his press secretary, Karine Jean-Pierre, warned that the Americans “deserve a free, right and open internet to the competition.”

Today the United States Department of Justice -in this Trump has not wanted Leave fallow The case opened by the previous administration- says that Google must disin part of Chrome’s property, which is described in the letter presented to Justice as “one of the biggest access roads for internet searches.”

A movement that makes sense in the eyes of those who ask it because, as it reflects, if Alphabet sells Chrome, the rivals may have the opportunity to compete for the control of internet searches. A paradigm shift that could end the Seven magnificent in the bag as they are known.

“Google can compete, but does not want to do it on equal terms“, declared this last Monday during his appearance before the courts the lawyer of the Department of Justice, David Dahlquist, who said the following in front of the magistrate:” Google fears competing against their rivals that, with the proposed, will only strengthen themselves. “

Leader

In 2021, Google put on the Apple table some more than 26,000 million dollars to ensure that its search engine was determined on all devices of the bite apple company. In this regard, Judge Amit Mehta declared that the Alphabet searches engine “was a monopoly and as such had acted.”

After something more than 10 weeks of judgment in which the magistrate met with the senior executives of Apple, Google and Microsoft -who competes with his search engine bing- and gathered an enormous amount of evidence, the United States federal powers ruled shrapnel enough to keep the pulse against technological.

Nor is it a secret that Mozilla Firefox has an agreement similar to Google with Apple to make the G be the predetermined search engine of its applications.

What does the Justice Department look for?

Now, the pressure of the federal authorities goes in several directions, but The most relevant changes For the company they would include:

The Sale of the Chrome search engine (just over 4.1 billion users worldwide). Open AI has already shown your interest in the business.

Share some data To help Startups to overcome entry barriers to the online searches business.

Syndicate the search data, but also of marketing of advertising to improve the quality of the services it offers.

These disinversions, not common in the market, could take several ways as the path that Google must follow in the coming years, predictably, outside the umbrella of Alphabet. For the moment, Two alternatives They resonate in the background: business split or the total sale of one of the parties.

How much would Google be worth in parts?

Any of the options could be profitable … for the investor. The Alphabet current market assessment is approaching the 2 billion dollars of which approximately 70%come from the sales of services related to their search engine. YouTube represents another 20% and the remaining 10% comes from the group’s cloud business.

Determining the value of these assets, today, is complex. But based on the company’s 2024 results, the valuation of an Alphabet that has to split the Google business It could shoot 30% to 2.6 billion dollarsaccording to the US investment firm Oakmark. With the operation, it could emerge, precisely, beyond the search engine in the rest of the company’s divisions.

For services of the Google search engine, And even without taking into account the value that future artificial intelligence projects can contribute, the capitalization of a futuristic Google search engine independent It could exceed 1.6 billion dollars, just over 61% of the value granted to Alphabet as a whole.

Beyond, Google Cloudone of the actors in the cloud business, could reach a value of about 300,000 million dollars taking into account that the Middle Bos (times that the price of the action collects the benefit) of the sector is about 10 times. In the case of YouTubewhom they compare with Meta and Netflix, in about 450,000 million. In the last year, the company entered both divisions about 20,000 million dollars, reflecting double -digit growths.

In addition, the need to bring “other bets” of Alphabet as the business of Waymosubsidiary in charge of the development of robotaxis technology (autonomous driving vehicles). Observing Tesla and taking into account the more than 100,000 monthly trips that Waymo cars perform in several US cities the assessment could be around 300,000 million dollars.

“We perceive a Alphabet as an exceptional business collection positioned to take advantage of the company’s first level the capacities. With shares quoting our profits projected by action for approximately 15 times, we consider that the shares are significantly undervalued, “they expose from Oakmark in their last letter to investors.

The mirror to look at: AT&T

Maybe one of the cases more sounded In recent history and that could be the mirror in which Alphabet looks at this envy against his monopoly from now on is that of AT&T. The telecommunications company – today subjugated to the competition of others such as Verizon or Comcast – had to divide your telephone business in 1982 When the US government disintegrated it accused of monopoly.

Until then, AT&T, known with the nickname Ma Bell He had dominated the telephony market in the US for decades. After a demand filed against the structure of the company in 1974 and after years of litigation, in August 1982 he signed an agreement for separate your 22 local companies in seven regional companies, known as Baby Bells.