A better way of looking at it is that Google is a collection of traffic drivers (YouTube, Gmail, etc) and monetizers (ads).
If you break the monetization into a separate company, the traffic drivers aren't profitless: because a large part of the ad profit was created from their traffic.
If Google Ads had to buy space / share ad revenue from Google YouTube, Google Gmail, etc then economics would look a lot more reasonable.
And I'd frankly be shocked if that isn't what they do internally, albeit more in the sense of "How much ad traffic do you drive, from your corner of the company?"
If an oil compnay gave away cars for free and became a car monopolist, people would be up in arms, vut Google's BS is somehow acceptable
YouTube, Google search, deep mind, Google fiber, waymo, Fitbit etc
Seems pretty easy to break up if you want to.
Google Cloud is big enough to be significant in terms of revenue, but AFAIK is only maybe breaking even in terms of profit. If you break up Alphabet into 26 or more different companies, you haven't broken up the monolith into non-problematic small companies 1/26th the size of the original, you've got 25 irrelevant companies and then one subsidiary that gets Ads which is almost as big as the original. Google even says as much in their financial statements, most of those listed companies are listed as 'other bets' and are a tiny fraction of the main line item that represents ads.
Google cloud gotten profitable enough that they only spent $5B to earn $4B in revenue last quarter. After a dozen years that's the best ever (classic case of monopoly leverage to get into a different market).
Advertising is "only" 81% of revenue but almost 100% of profit.
Some other commenters have proposed that properties like YT and Android drive ad traffic but when I looked at the last 10Q it looked like YT was about 10% of ad revenues. I believe Android is a net loss but worth it in that it's an offset to reduce payments to Apple. But I just skimmed the filing because this is just an HN comment.
It would also stop them favouring their own products in search results
Few, if any of those companies would be viable on their own. They require monopoly support. For example Google Cloud loses a billion a quarter (they spent $5B last quarter total in $4B).
As far as the cloud market goes there's really only one player, the profitable, pure play AWS. Everybody else is losing money, and mostly fudging the numbers (Google "cloud" includes Gmail, Google Workspace etc; MS's cloud includes running Windows for big customers, Office 360 etc etc).
Nest is marginally profitable.
Otherwise it's pretty thin gruel.
Perhaps Google Search, Chrome, and the advertising business could be split. Or Google Search could be split into Google Search 1 and Google Search 2.
0: https://www.theverge.com/2020/2/3/21121207/youtube-google-al...
With competing "engines" (defined as a ranking algorithm and frontend to query said algorithm) building from the same, high-quality index competition in the search space could get much better.
Engines such as DuckDuckGo relying on Bing for the majority of their index is a decent example of how this might work.
Big things would be Advertising separate from other things and bound to only advertising, and require it contract with the other units on public and FRAND terms. Web Search would be another unit, and it would be barred from developing its own advertising platform and need to use a mix of advertising platforms based on public criteria, probably with a cap of say 75%? AdWords. You'd have at least one more group for communications (mail, the 7 messengers, etc) which maybe includes the document tools too, and might include G Suite; this group could develop its own ad platform, but not to sell ads on 3rd party sites. Android would need to be a separate unit, it could either require a per device fee or FRAND terms for search etc bundling (similar the what they do in the EU); Chrome maybe fits in this group, or may need its own group. Google Fiber would probably get shut down or sold to an incumbent telco, but maybe just spun out. Waymo and other research stuff would probably need to be spun out, not sure if that can live on its own though.
Cloud services would be its own group, perhaps providing services to the other groups, possibly requiring public pricing, but I don't know if that's really an issue.
I think that's most of it. Lawyers from DOJ and Alphabet could work out the details. Getting a competitive ad market out of the deal would be hard, but at least it could be more transparent, and eliminating cross-subsidization of Google businesses is definitely possible.
Start by cloning the whole source repository for each company, and prune out the things that don't need to stay; if in doubt all successor companies get access to all of it.
Android is a separate unit, AFAIK.
Most people are angry at Facebook for reasons like not understanding their business model (they sell my data! is one I hear often) or because Facebook allows a platform where average people can speak their thoughts.
They would immediately be acquired by a competitor or declare bankruptcy.
I mean, yeah this is exactly the point. They have locked competition out of the loss-leading categories by undercutting them. Breaking them up forces the loss leaders to compete on an even playing field, which will mean more competition.
Not denying their monopoly position, but how could Google meaningfully be broken up? It's really just a single business (advertising) with a gaggle of loss leaders adding up to less than 20% of revenue. Even pushing advertising down to 80% took a huge amount of effort.
It's not like Standard Oil which was a vertically integrated trust of several points in the value chain, or the bell system which could be broken up geographically (and manufacturing spun out). Or FB which could divest business units like Instagram and WhatsApp.