Google’s Ad Business Is Going Away?
In what could amount to a shrewd maneuver, Google may be letting go of its ad business in order to avoid a lawsuit, here's why.
This article is more than 2 years old
Google’s ad business is in big trouble after the possibility of a new antitrust lawsuit has been proposed against the company. In response to the investigation, Google may split up its ad department and move it to its parent company Alphabet’s jurisdiction. The US Justice Department’s decision to file against Google could mean a complete advertising shift for the company and other tech conglomerates.
According to a report from the Wall Street Journal, Google is proposing to switch its ad focus. The tech company will likely move its website ad business to its parent company Alphabet. This could mean that a new sector or company would form to hold Google’s advertising business instead of eradicating it completely. Though Google is being threatened with a possible lawsuit, the ad business most likely won’t go away since it’s a multi-billion-dollar enterprise.
So why is Google splitting up ownership of its ad business during this tumultuous time? Moving the ad division doesn’t mean relinquishing it entirely, but helps weaken Google’s overall ownership of the business. The US Department of Justice’s main issue is how much control the tech company has over placing advertisements on websites. Since Google has ads for both buying and selling, the company has made a dominating monopoly in the online advertising world. Putting the ad business under a different jurisdiction could mitigate the issue between Google and the DOJ.
But, Google is not alone in marketing products to buyers and sellers. Amazon is also guilty of this advertising tactic as well, influencing Amazon product sellers to sell to Amazon buyers. Uber has a similar interface, too, with its drivers and riders. Though each company uses a strategy of advertising to keep business insular, the DOJ is concerned about Google’s monopoly on advertising and online business, worried that the company could easily control the whole virtual buying and selling economy. Many believe that the solution to get the DOJ off Google’s back would be to split up the buying and selling advertisements between the tech company and its parent company Alphabet.
Google moving part of its ad business to Alphabet is the next step for the company, but how much will it change its advertisement dominance? Will moving the ad business to another sector under the same conglomerate umbrella really make a difference? Though this could help separate advertisements to an average viewer, since some viewers wouldn’t know that Alphabet and Google were connected, both companies are run by the same CEO and CFO. Though splitting up the divisions sounds better on paper, both the tech giant and its parent company are run by the exact same people, making this bifurcation almost unnecessary. If the DOJ is worried about Google becoming too powerful in the online agency world, the US government might enforce stricter consequences for the tech conglomerate.
The world of virtual advertising is a tricky and often nefarious field. With media platforms known to sell user information to third-party retailers, it’s known that tech companies engage in some practices that tow an ethical standard. Google’s issue with the DOJ is an advertising monopoly issue, which might have a decimating outcome once the government follows through with its internal investigation.
