Had Standard Oil not been broken up by the Supreme Court in the early 1900s, it would likely be the only company in the world with a trillion dollar market capitalization. The 34 companies into which it was broken currently have a market capitalization that collectively exceeds the trillion dollar mark. Other notable breakups forced by the federal government on anti-trust grounds include AT&T and the Aluminum Company of America, but neither were divided into components that collectively represent anything close to $1 trillion now. However, these same drivers of historical trust-busting are less likely to be as potent in keeping Google from becoming the first trillion dollar company.
There are reasons to believe that Google will not fall prey to the same arguments used to break up previous monopolistic enterprises. Google, for one, has become the “Wal-Mart” of the Internet. Anti-trust regulators exist largely to protect consumers, but Google has made providing valuable services for free a core part of their company. Google relies primarily on charging businesses for products and services – like serving ads – and hence is able to provide the search engine to consumers free of charge.
Further, trust-busting efforts have historically focused on companies that gain near-monopolies within their respective industries. While Google maintains a market share of more than 65 percent in most search engine markets worldwide, there is nothing keeping customers from using Bing, Yahoo or any of the other less popular search engines. When the U.S. government sued Microsoft, it focused on Microsoft’s ability to set prices for its operating system and office productivity software. Price-setting has never been an issue in the search-engine market.
Rather, investigations by governmental bodies such as the European Union (EU) into Google’s dominance of online searching have focused on the control Google has over its ranking system. Drawing a connection between control over a ranking system and disadvantaging consumers is murky at best. Dominating the search engine market, however, is not likely in and of itself to enable Google to become the first trillion dollar company.
What may enable Google to eventually reach a trillion dollar market capitalization is its pathological focus on planting seeds in industries ranging from healthcare and robotics to transportation. Google was the single largest acquirer of companies focused on robotic hardware and software in 2013. It has recently dived into the healthcare market through the launch of its completely owned California Life Company, or Calico for short. It also has one of the largest venture capital portfolios in the world, and currently counts more than 225 companies in its portfolio, including potential industry game-changers such as Uber.
Tallying up the various industry sizes from companies in which Google is investing, including; transportation, healthcare, search, mobile operating systems, and e-commerce, Google is clearly involved in a collage of industries that collectively exceed the trillion dollar mark. Because Google regularly ranks as the single most desired company for workers, it is able to attract the best engineers and innovators worldwide. This collection of talent, combined with a pervasive focus on numerous industries, may well be exactly what Google needs to become the first company to hit a trillion dollar market cap.
Opinion by Benjamin A. Buchanan