It's really hard to break up a monopoly; first, there are the practical considerations - the protracted legal wrangle that consume all the resources that competition regulators have and then some.
The most recent attempt to break up IBM lasted from 1969-82, and in each of those years, IBM's legal bills exceeded the ENTIRE BUDGET of the FTC's antitrust division. Toxic monopolists have deep pockets and huge upsides, and they can and do spend like crazy.
But even unsuccessful breakup attempts can be worth it There's good reason to believe IBM chose commodity components for the PC because of the scars of the breakup fight, and likewise tchose not to shut down PC clones because of that trauma.
There are persistent insider tales that Microsoft didn't strangle Google because they were gunshy after the DoJ's failed breakup attempt. Last year, Gates attributed the company's lack of interest in Android to the fear of more DoJ scrutiny.
So maybe we decide that despite the blood and treasure, we're going to take a run at breaking up tech monopolies. Next question: how should they be broken up?
That's a question XML co-inventor Tim Bray has been investigating.
Last month, Bray quit his job as a senior exec at Amazon over the company's unethical conduct, particularly its treatment of warehouse workers and the retaliation against tech workers who acted in solidarity with them.
Earlier this month, he made the case for breaking up Amazon and made some pretty definitive statements about how Amazon's cloud business would be better off separated from the rest of the company.
Today, he assays some thoughts about how to break up Google.
It's harder to be definitive here because Google's financial disclosures are really poor. We know how much revenue different divisions bring in, but not how much PROFIT they represent.
That makes it hard to know whether a given division is "a money-spinner or strictly a traffic play."
Notably, there are no figures as to the profitability of Android, the most popular OS in the world. That's actually pretty weird, when you think about it.
After looking at the market power vested in Gmail, Maps, Cloud, online ads, Android and Youtube, Bray makes some suggestions for how Google could be broken up.
First, split off ads. That's a no-brainer - every trustbuster I know starts there.
Next, Youtube: "it’s got no real synergy that I can detect with any other Google property."
What about Android? It's not even clear whether it's a business. Bray's not sure what to do about it.
Maps is almost certainly a business, but it's really toxic and badly run. Bray wants to start by forcing Google to publish its financials.
He thinks Cloud should be spun out as a competitor to Amazon, with Google Office alongside of it as a competitive advantage.
He makes the point that "we could hope they’d break Google’s habit of suddenly killing products heavily depended-on by customers. You just can’t do that in the Enterprise space."
Bray: "Google’s whole is worth less than the sum of its parts. So a breakup might be a win for shareholders...the fountain of money thrown off by Web-search advertising leaves a lot of room for laziness and mistakes in other sectors of the business."
From the outside, it certainly appears that the company has lost the ability to make successful products: after search (a genuine innovation) and Gmail (a GREAT Hotmail clone), the company had an (unbroken?) string of failures in internal development.
All (?) of its other growth has come from buying up other companies. For all its labs and R&D, Google sure seems to be in the "buying great things" business, not the "creating great things" business.
Of course, Google's also REALLY good at scaling and operationalizing other peoples' ideas, but that's always true of monopolists: there was lots wrong with Standard Oil, but it was really good at pumping oil.
And let's not forget how much of Google's incredible scale and operational excellence is the result of...buying companies that produce scaling tools, hardware, and management.
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