Should Google Break Itself Up? A Thoughtful Yes.

Google—one of the world’s most powerful tech giants—is facing renewed scrutiny and a provocative suggestion: should it break itself up before regulators do it for them? A growing chorus of analysts, including D.A. Davidson's Gil Luria, thinks the answer is yes. And surprisingly, it may be the best move Google could make—for innovation, for value, and even for survival.

The Antitrust Pressure Is Real

Google has lost two key antitrust cases recently. Its advertising dominance and Android ecosystem are under fire. U.S. regulators are aggressively targeting what they see as monopolistic practices, echoing the Justice Department’s historic battle with AT&T. This isn’t just legal posturing—it’s a systemic response to a tech industry that’s grown so consolidated it’s beginning to choke on its own success.

The Microsoft Comparison: A Missed Opportunity

To understand the stakes, consider Microsoft. In the early 2000s, it too faced a monumental antitrust case. It wasn’t broken up—but it also missed the boat on nearly every digital transformation that followed: search, mobile, social media. It clung to its legacy structure and culture—and only rebounded years later under new leadership.

By contrast, had Microsoft split off its browser or OS business, each unit might have been forced to innovate or die. And innovation often thrives when survival is on the line.

Google’s Complexity Is a Liability, Not a Strength

From a financial standpoint, Google looks like a juggernaut. It generates $69B in quarterly revenue, with fat profits from Search and YouTube. But look deeper, and you’ll see a concentration risk—nearly all profitability comes from advertising. Other arms like Cloud or hardware are either barely breaking even or still burning cash.

While the synergy argument—“AI developed in one division helps others”—sounds compelling, it often becomes a barrier to transparency. Internal projects that tap into shared resources tend to get unearned preference, not because they’re better, but because they’re "leveraging the core." This creates distortion and slows innovation.

Ironically, splitting up Google might improve both transparency and creativity, as each spinoff would be forced to stand on its own merit.

Digital Transformation Demands Agility

One of the most eye-opening KPI for every company, which is a strong indicator of its digital maturity: deployment frequency.

Google is strong here, yes—but Amazon is the benchmark, deploying software 4x more frequently. That level of agility lets Amazon explore new profit pools almost in real time. A company that can launch, test, and iterate faster wins in today’s economy.

Despite Google’s engineering excellence, its decentralized management often leads to slow decision-making. In practice, it sometimes resembles a federation of mini-fiefdoms rather than a nimble disruptor. Spinning off units could enhance accountability and speed, not reduce it.

Customer-Centricity and Focus: A Likely Benefit

In a breakup scenario, YouTube, Google Cloud, or even Chrome OS would need to fight for their own survival. That forces focus. It would also require each unit to become truly customer-centric, not just "aligned with Alphabet strategy." When businesses are closer to the end user and can't hide behind the profits of Search, they become sharper.

Moreover, innovation wouldn’t stop. The core technologies like AI would still be licensable. Just like AWS provides infrastructure to competitors of Amazon Retail, spun-out Google units could access foundational tools—but they’d need to justify their use and cost, not assume it as a birthright.

The Real Risks

• Smaller units are easier to attack—both competitively and legally.
• Talent allocation might suffer, especially if the A-players gravitate to the “coolest” spin-off.
• Culture could erode without the cohesive halo of Alphabet.

But these risks pale in comparison to the bigger one: irrelevance. If Google doesn’t evolve, the risk isn’t just regulatory—it’s existential. The rise of AI (including ChatGPT), changes in search behavior, and growing dissatisfaction with ads mean that the ground beneath Google’s feet is already shifting.

My Take: Do It Before You're Forced To

Google splitting up would not be a failure—it would be a proactive act of transformation. It would unlock value, increase transparency, speed up decision-making, and enhance innovation. Yes, it would be messy. Yes, it would be risky. But so was staying the same in a world that’s changing faster than ever.

We’re no longer in an era where size guarantees security. In the new economy, speed, clarity, and focus win. And if Google wants to lead, it should be brave enough to break itself.