What would a FANG breakup look like?

November 27th, 2018 at 12:53:33 PM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 112
Posts: 8886
There are rumblings that it may be time to break up the FANG (Facebook, Amazon, Netflix, Google) super-tech companies. Some would be easier to chop up than others. Amazon could have the retail arm broken from everything else they do, leaving a marginally profitable retail company and some niche tech. Netflix I kind of see no reason as they are nowhere near a monopoly, though they could fall to pressure to allow more smaller producers on their platform. Google could be forced to break off YouTube for one. Could follow what they did with AT&T + Standard Oil and make maybe 5-7 "Baby Googles" all taking the algorithm as it is and being allowed to then modify it as they wish. Facebook kind of is what it is, though they could be forced to divest the non-FB assets and fall to having their very biased editorial policies be more balanced.

The question is, would any of this be a net benefit to the consumer? The SO breakup was great for the consumer and even better for the investors. Ditto AT&T. OTOH, Google works so well it is hard to imaging life without it. Though it was hard to imagine more than one phone company at one time.

DISCUSS.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
November 27th, 2018 at 1:37:43 PM permalink
rxwine
Member since: Oct 24, 2012
Threads: 132
Posts: 6732
Quote: AZDuffman
DISCUSS.


One difference I see is MaBell had all the telephone wires. (didn't they?) Google basically beat out all the other search companies that used to exist. Bing exists by the sheer presence of the monolith Microsoft.
Nobody learned anything from the global financial crisis.
November 27th, 2018 at 1:58:17 PM permalink
AZDuffman
Member since: Oct 24, 2012
Threads: 112
Posts: 8886
Quote: rxwine
One difference I see is MaBell had all the telephone wires. (didn't they?) Google basically beat out all the other search companies that used to exist. Bing exists by the sheer presence of the monolith Microsoft.


She had almost all the wires, except a few indies here and there usually in the sticks. But she also beat out all the others in the early days.
The man who damns money has obtained it dishonorably; the man who respects it has earned it
November 27th, 2018 at 2:32:01 PM permalink
Pacomartin
Member since: Oct 24, 2012
Threads: 869
Posts: 10320
Amazon, is worth more to the stock market than Walmart, Costco, T. J. Maxx, Target, Ross, Best Buy, Ulta, Kohlís, Nordstrom, Macyís, Bed Bath & Beyond, Saks/Lord & Taylor, Dillardís, JCPenney, and Sears combined.

If Apple has a market cap of $1.09 trillion as of 3rd quarter 2018, compare to GDP (nominal value ) of two very large countries
Mexico $1.15 trillion
Indonesia $1.02 trillion

Remember Doonesbury making fun of Apple's Newton (1993)


Always one of my favorites even after 25 years.

Quote: AZDuffman
Netflix I kind of see no reason as they are nowhere near a monopoly, though they could fall to pressure to allow more smaller producers on their platform.

Netflix isn't really in the same league

Market Cap
$826.838B Apple
$773.265B Amazon
$728.248B Alphabet (Google)
$387.962B Facebook
$221.542B AT&T
$174.519B Comcast
$169.397B Disney
$116.273B Netflix

Quote: rxwine
One difference I see is MaBell had all the telephone wires. (didn't they?)


The 1984 breakup was not the first or second time regulators came after AT&T. The first originated with a 1907 complaint alleging antitrust practices. Worried the case could heat up the movement for government ownership of the telephone and telegraph, Bell settled the case in 1913. The company made two big concessions. One, it divested itself of telegraph company, Western Union, which it had bought in 1907. And two, it agreed to not actively pursue buying rivals in local markets. This created boundaries across the country for markets to be served by Bell and its rivals. The terms of the settlement would dominate the American telephone system for the next 70 years.

Another antitrust suit was launched in 1949 looking to break the vertical link between Bell's telephone service and its manufacturing arm, Western Electric, which leased telephones to customers to use with its phone service. The Bell System does not give up Western Electric. The Justice Department forces AT&T to get out of the computer business. AT&T could have gone into the computer business. But in order to keep them from going into the computer business, guess what? They had to open up their vault, okay, because the business, telephone, and telegraph business in the United States is built around the control of intellectual property, patents. And you know what the jewel of the crown is in their vault? A transistor. Bell had so much faith in the telephone it gave up a bunch of inventions to keep it, including the one that led to the computer business as we know it today. But Bell got to keep its telephone business, including Western Electric.

Bell continued to dominate the telephone industry for the next 20 years reaching 90% of US households by 1969. In 1974, the Justice Department filed an antitrust suit against the company. Eight years later, in 1982, a consent decree ends the antitrust suit. This is it. After almost 100 years, one of the most dominant forces in American technology and communications is told by the government, "You're too big." But how do you break up one of the biggest and oldest companies in the country?

In 1996, RBOCs NYNEX and Bell Atlantic merge to become one company. You know it today as Verizon. In 1995, Southwestern Bell rebrands itself as SBC Communications. They buy out Pacific Telesis in 1997 and Ameritech in 1999. 15 years after the breakup, only four of the seven RBOCs remain.

The new AT&T tried buying T-Mobile in 2011, but was denied by the Obama administration. They do, however, purchase cable provider, DirecTV in 2015.