Why not split search and AdWords while they’re at it? There are too many perverse incentives created by the combination of Google’s ad monopoly with their search monopoly.
Why not offer two Googles, one for people who don't mind sifting through three pages of SEO results when they search for actual information, and another subscription that cuts out ads for those willing to shell the cash?
For example. If you’re looking to refinance a home loan; you’re easily worth $100-$300 of revenue to Google; with a decent number of searches and clicks (eg “refinance”, “mortgage interest calculators”, etc)
If Ex-Google Ads has the best ad marketplace and can use the space most efficiently, they will bid the most and buy most of the space. So we will still have Ex-Google Ads on Google searches, but they will be owned separately. What difference will it make?
They would be owned, operated, and governed separately, and Search could have the different ad providers compete amongst each other to provide the best rates. Add it all up together and it'd be a huge difference. Each of the two separate companies would have separate management and a fiduciary duty to maximize their own profit independently, even at the expense of the other.
Consider that Verizon and AT&T, the two largest mobile phone providers in the US, are both Baby Bells resulting from the break-up of Bell Telephone Company in an anti-trust action. They compete strongly against each other, in a way that would absolutely not be true if they were still the same company.
Agreed that breaking up a company horizontally into two competing companies creates competition between the two companies. Here we’re talking about breaking up Google vertically into two companies with a supplier-client relationship. The supplier and the client aren’t going to be competing with each other because they are in two different businesses.
It frees up the supplier and client to compete against each other by patronizing other suppliers/clients in the industry. Right now no one else can sell ads on Google Search; after a break up, other competitors would now be able to.
Courts will generally not second-guess the judgement of management, but they are obliged to act in the interest of their shareholders, primarily, because shareholders have the ability to fire the board of directors.
If someone who owned a share of Search Google managed to get a controlling interest in Ad Google and was operating it to benefit Search Google to the detriment of Ad Google's minority shareholders, that would be one of the rare cases where a court would intervene.
I'm more referring to what the shareholders will do if the company is clearly not acting in the interests of actually making them money, but rather, cozying up to an now-unrelated company in a way that leaves lots of potential money on the table for no reason.
Countless shareholder lawsuits say otherwise though. So it may not be their fiduciary duty, but if there's a good chance they get sued if they don't maximize profits, they will anyway.
The Baby Bell breakup was 36 years ago, resulting from antitrust action brought 46 years ago. Moreover, AT&T and Verizon have consolidated six of the seven Baby Bells into the 2 companies.
But it left the local monopoly in palace instead of mandating Local Loop Unbundling which is why the US and Canada has such poor competition for highspeed internet.
2 is still more than 1, and there was a lot more competition in the intervening decades when there were more than 2. So it sounds like it worked for the most part? Certainly more so than doing nothing.