‘Google will be broken up’
John Malone, the veteran media and telecoms investor, has predicted that Google will be broken up by competition watchdogs to curb its dominance online.
The billionaire ‘‘cable cowboy’’, who controls a vast empire including Britain’s cable operator Virgin Media, the broadcaster Discovery, the travel website TripAdvisor and Hollywood studio Lionsgate, said Google would in future not be allowed to offer other services on top of its monopoly on web search.
Malone said: ‘‘In my opinion, Google will be broken up and will not be allowed to go vertical on services, anything in which they control the search algorithm and figure out presenting it to the consumer.’’
The 77-year-old made the forecast at a private event for Virgin Media staff in Dublin in July.
The Sunday Telegraph obtained a transcript of his comments.
Malone said Google’s ability to use its search engine to steer web traffic away from rivals in neighbouring digital markets would be its undoing.
Google denies such behaviour but was last year found by European watchdogs to have abused its dominance of search to crush its competition in shopping comparison and was fined more than £2 billion (NZ$3.9b).
‘‘We own a company called TripAdvisor. When you go on a mobile site, you might get two or three results of a search,’’ said Malone.
‘‘For a company that is quite dependent on getting its traffic from search, when Google decides they’re going to change their algorithm . . . game over.
‘‘Now, I don’t think that can sustain. I think that will ultimately fail.’’
Malone also answered questions over the threat to traditional television from Netflix and other streaming players.
He said attempts by Hollywood studios to gain heft via the merger of 21st Century Fox and Disney, and the battle between Disney and Comcast to take over Sky were ‘‘late to the party’’.
He added: ‘‘In my opinion it’s being driven by a phenomenon of disintermediation that’s taking place where Amazon and Netflix are going to the writers and the producers and the directors and saying ’what do you need the studio for?’. The traditional role of the studio was to finance ideas and then distribute.
‘‘Both of those are better done, at least in [Netflix chief executive] Reed Hastings’ mind, by Reed Hastings.
‘‘So, as a result, somebody like Rupert [Murdoch] is looking at the future and saying this content is either going to cost me a lot more money to create, and I still might not be successful, or I’ve got to take my assets, put them together with Disney’s and maybe together we have enough scale that we can play in that global game.
‘‘But, you know, they are late to the party. So it’s going to be an interesting phenomenon.’’
– Telegraph Group