In just a few weeks, a federal court in Virginia will begin hearing a major antitrust case that could force tech giant Google (GOOGL) to split part of its advertising tech business into a separate company. The focus is on Google Ad Manager, the part of Google that helps websites sell ad space. While the case hasn’t been decided yet, Google is already taking steps to prepare, according to The Information. For example, last month, Google Ad Manager staff held a dinner in New York with top advertising agencies to talk about working more closely together.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
This surprised the agency employees, who are used to working with a different part of Google that helps buy ads, not sell them. These recent moves suggest that Google may be preparing Google Ad Manager to operate independently, in case the court forces a breakup. Interestingly, expanding into ad buying could make the unit more complete, like other independent ad tech companies. However, if the unit remains within Google, this shift wouldn’t make much sense since it would just create competition with Google’s own ad-buying division.
Unsurprisingly, Google argues that a breakup isn’t needed and instead says it will improve how its tools work with others. Still, the case has momentum, especially after a judge ruled in April that Google holds a monopoly in helping publishers sell ads, which backs up the Justice Department’s position going into the trial. Nevertheless, it is worth noting that the unit has been having trouble adapting to newer markets like streaming TV and mobile apps. Indeed, its revenue has dropped (falling 7% from 2022 to 2024), and while it still earns billions, it’s losing ground.
Is Google Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 27 Buys and nine Holds assigned in the past three months. Furthermore, the average GOOGL price target of $217.25 per share implies 1.7% upside potential.
