Another “loser” case against Google
Investors already expected major surprises and many elements from the lawsuit. It has been reported that the DOJ would focus on Google’s search default deals and Wall Street experts had written research about this, according to Bloomberg.
The media outlet also noted speculations that any eventual remedies won’t have a lasting impact on Google’s ability to make money from its leadership in search advertising.
On the other hand, CNBC’s Jim Cramer said Alphabet would go from a “buy to a strong buy” if the case against its Google unit were to lead to a break-up.
“I just think it’s another ‘loser case’ by the government. And by the way, the sum of the parts is worth far more than $1,500,” Cramer said.
The DOJ will be having a hard time proving its case that Google abused its market power in its search and advertising business, the Mad Money host said.
Alphabet shareholders, Cramer said, would emerge as winners if the government were to force Google’s parent to split up.
“I’ve been saying over and over again, they ought to break this company up and bring out value. It’s the DOJ taking it from buy to strong buy,” he said. “Ultimately, Google, if they break it up, then you own the stock. If they don’t break it up, then you own the stock. It’s a pretty good situation.”
The government, at the end of the day, could force Google to halt paying billions of dollars to its partners like Apple to make its search engine the default on their devices.
