That Google Doesn't Love the DOJ's Plan Tells Us Something Is Off

This year the DOJ prevailed over Google in its anti-trust trial suggesting that Google used monopolistic tactics to grow and/or maintain its search engine dominance. Had the DOJ suggested a total breakup a la AT&T where there would be regional Googles or category-based Googles, both Google and consumers would be worse off. Not only did the DOJ not propose anything radical, their proposal should make Google significantly wealthier with zero downside!

The DOJ's proposal has two key components: 1) Stop paying others to be the default search engine choice in browsers and on devices, and 2) Sell Chrome, the browser which enjoys 60%+ worldwide market share.

By discontinuing payments to Apple, Samsung, and others, Google stands to save more than $20 BILLION per year and likely experience minimal - if any - decline in its search engine market share. $20 billion added straight back into profit and so long as Google keeps making the best search engine on earth, there's no downside. A win for Google and a huge win for Google's investors. This at a time where some extra billions would be helpful in building what's required for an AI future!

Now, to selling Chrome. Chrome is a free product that Google clearly spends significant money to maintain and improve. "When the product is free, you're the product," the saying goes. However, a very senior Google official very clearly stated at the LUMA DMS East event this year that there is a hard wall between Chrome and the Google ads team. To paraphrase, "It's no different than Safari and Google. There is not a relationship."

In this case, the DOJ is telling Google to sell a product they spend significantly to maintain that makes no revenue. Not only does Google make money from the sale, but they no longer need to employ the team that works on Chrome. While there is likely some incremental usage of Google's products like G Suite, YouTube, etc. from Chrome users, I would expect that post-sale not only would very few people switch, but that any less usage of Google's products will be next to nothing.

In short, there is almost no downside to selling Chrome! Well, unless there really is data sharing? While they've told the advertising community they don't do this, when I googled it, Google's AI says that yes, Chrome DOES share data with Google Ads.

Why is Google fighting what feels like a heck of a gift from the DOJ?

1) Google is behind in AI. It's "AI" search results right now is essentially a copy/paste from the content of the top result. That's a lawsuit waiting to happen and not sustainable or good enough long term. When or if ChatGPT's new web search function or Perplexity begin to eat into Google's share, the inability to pay to maintain the default spot on devices and in other browsers would absolutely accelerate and erode Google's search engine share. $20+ billion/year is nice to not have to spend for a few years, but that may be cheap compared to permanent share loss if rivals more permanently eat into overall share.

2) Google says that divesting of Chrome would be "harm Americans" because it would lessen our collective ability to be technological leaders. Literally no one buys that. In fact, that Google is protesting the divestiture of a money-losing part of its business at all should raise red flags. The only answer, of course, is that the data Google gets from seeing 2/3 of the world's browser traffic, is immensely valuable. In a world where Apple wants all internet traffic to go through apps, this is Google's primary source of truly complete data.

Google has always impressed me with their ability to spin literally anything as a win for advertisers, consumers, and humanity. That the spin is separating further from reality tells just about all we need to know.