Google could help itself in antitrust fight with more transparency about Alphabet

Alphabet’s opacity is hindering Google’s antitrust fight. Despite huge efforts outside its core online search business, the $ 685 billion juggernaut still looks like a one- trick pony with nearly 90 percent of revenue coming from ad sales. Shedding more light on its autonomous vehicle, YouTube, biotech and other promising ventures might comfort investors about the looming risks of antitrust regulation. It could also help them look past shortterm hiccups, like the recent quarter’s surprisingly large decline in advertising spending per click.

Founder Larry Page has attempted to highlight the group’s value by reporting Google separately from its other pur- suits. This is mainly to keep investors onside by illustrating the size and margin of these operations once extracurricular activities were stripped out.

The antitrust attack against Alphabet has been led by European authorities. The European Commission’s initial assault has focused on how Google used its heft in search to dominate related markets. That resulted in a $ 2.7 billion fine, which took a bite out of the most recent quarter’s bottom line. Other parts of Google, such as the licensing terms of Android, are also in the line of fire.

A greater emphasis by executives on where its other promising divisions are going would have multiple benefits. There’s value in operations such as selfdriving unit Waymo – perhaps $ 70 billion according to a recent optimistic Morgan Stanley estimate – that can be clarified. Even parts of Google itself, such as YouTube, probably would impress investors with more disclosure.

Highlighting opportunities and preliminary successes in areas such as green energy and medical research might also give regulators pause. Google’s cash cow gives it the resources to do basic and applied research and development on a scale few others can – or are willing to pursue.

Hobbling Alphabet may mean fewer advances coming out of the company, to society’s potential detriment. This is essentially the bargain AT& T once held with the US, allowing the telephone firm to retain a monopoly for decades. Offering a similar bargain, perhaps with some greatly expanded research labs in Denmark, might just influence the antitrust calculus.

The author is Robert Cyran, a Reuters Breakingviews columnist. The article was first published on Reuters Breakingviews. bizopinion@ globaltimes. com. cn