A poll of Benzinga readers found that they don't believe Alphabet Inc
What Happened: Google parent Alphabet has long been a target of potential antitrust investigations due to the company's large market share in online search.
The DOJ recommended that Google share search data with competitors to foster fair competition. The department also said Google should consider selling its Android operating system.
"Google's unlawful behavior has deprived rivals not only of critical distribution channels but also distribution partners who could otherwise enable entry into these markets by competitors in new and innovative ways," the DOJ said in a statement.
A recent poll of Benzinga readers found that they don't believe Alphabet should be split up.
"Should the Department of Justice break up Alphabet (Google)?" Benzinga asked.
The results were:
- Yes: 36%
- No: 64%
"Which part of Alphabet would you most want to invest in if it splits up," Benzinga asked.
The results were:
- YouTube: 43%
- Google Search: 31%
- Android: 17%
- Chrome: 9%
Why It's Important: While Alphabet likely does not want to split up or sell any of its units, investors could end up the winners according to analysts.
Jefferies analyst Brent Thill recently said that a breakup or business separation could be good for shareholders.
"We don't believe a full breakup would happen. Even if it did, it would be good for shareholders because the sum of the parts is greater than the whole," Thill told Yahoo Finance.
Needham analyst Laura Martin has been emphasizing for months that a forced breakup of Alphabet could lead to a significantly higher valuation.
"We believe that GOOGL is worth more in pieces than together, so we welcome regulators' attempts to break up GOOGL," Martin said in a new investor note.
A break-up could put a spotlight on the valuation of video platform YouTube, Martin said.
"We calculate that YouTube would be valued between $455B-$643B if separately traded."
Martin said Alphabet shares would likely trade higher if the company breaks up because investors would be willing to pay more for "pure-play assets," more data points could be publicly shared, and employees would receive shares in business lines they directly impact.
Martin has a Buy rating on Alphabet and price target of $210.
GOOG Price Action: Alphabet stock trades at $167.81 Friday versus a 52-week trading range of $129.40 to $193.31. Alphabet stock is up 21.3% year-to-date, trailing the 25.6% gain of the SPDR S&P 500 ETF Trust