Yesterday, Silicon Alley Insider wrote that Obama’s pick to head the Justice Department’s antitrust unit is decidedly and publicly anti-Google. Now, as Henry Blodget put it, this in no way means a certain antitrust movement against Big Rainbow (Google):
Hard to view this as anything but negative for Google. A strident government attack on the company seems unlikely (and ill-advised), but Google’s future moves will almost certainly be more scrutinized and restricted than they have been to date. That’s not good for shareholders.
However, I wonder if we as startupers – rather than shareholders – should encourage or discourage such an action.
In the past, of course, startupers and VCs have rushed to Google’s defense (see my Google Antitrust articles from 2007). Not only has Google maintained relatively good Karma among the early stage community (awesome APIs will do that), but also Google has been seen as an attractive exit option for startups ever since they went public in 2004 and began a buying spree.
However, an analysis of this list of Google acquisitions (graphed below) reveals a suppressed appetite in Mountain View, leading me to wonder if keeping Google as a monolith is such a great thing for startups and VCs, who – in a SOX environment – increasingly rely on acquisitions as a way to realize the value of their company or investment.
If Google’s status as a monopoly were taken on by the Justice Department (and if the DoJ prevailed), Google would likely split itself into several smaller companies, leaving the world with several powerful, cash-rich micro-Googles, in turn leaving with world with that many more exit or business development opportunies for startups.
On the flipside, if Google isn’t split up, its obvious that Google’s appetite for acquisitons will continue to slow, if not halt altogether, in fear of inducing futher scrutiny from the DoJ.
So, disregarding any political beliefs, corporate loyalties or grudges, I wonder: Should those of us in the startup market hope for a Google shakedown? Would an antitrust suit do us well?
The answer may be surprising.