Jason argues spinning out YouTube and Waymo would unlock massive shareholder value, but a forced Android divestiture would be highly damaging to Google as the search default could be auctioned to competitors like Microsoft.
YouTube and Waymo, those should be like a $400 billion company, a $50 billion company...The most damaging one would be Android. If they force them to sell Android, that is going to be massively damaging.” ⚑
Sacks argues Google should proactively break itself into Search, Advertising, YouTube, and Android, which would unlock conglomerate discount value and force leaner, more efficient operations—both accruing to shareholder benefit.
if you break up the company into 3 or 4 smaller companies, right, there's just way less room for people to hide. And I think that they could all be leaner, more efficient operations, and that would accrue to the benefit of shareholders.” ⚑
Chamath believes a Google-initiated breakup could create a shareholder win where the sum of parts exceeds the current conglomerate value, but considers a full government-forced breakup unlikely and still only a single-digit probability.
You can do it in a way where the sum of the parts will be greater than the value today of Google. So I think that there's a shareholder win. It needs to be offered by Google and then negotiated.” ⚑
Friedberg sees a potential market-cap unlock from spinning out YouTube and other segments due to conglomerate discount, but warns that the DOJ's anti-success framing and the complexity of shared infrastructure make a forced breakup risky.
there's always this notion of what's called a conglomerate discount. When you put a lot of different businesses together, the businesses in aggregate get valued less than the individual parts would...each one of these kind of like” ⚑