The Wall Street Journal is reporting today that Google has suggested creating a separate company under the Alphabet banner for the portions of its business that auction and position advertising on websites and applications.
Update 7/14: According to Bloomberg , the DOJ is expected to reject Alphabet’s concessions, opening the door for an antitrust case against Google’s monopoly in online advertising that might be filed in the coming weeks.
Original 7/8: This concession is intended to prevent a legal action from the US Department of Justice, which would prefer an outright sale or divestiture of Google’s advertising business. It’s unclear how receptive regulators are to this offer.
The reported Google-Alphabet split would still leave everything under the control of the same firm, albeit with some separation and likely additional modifications to how ads work. With its own CEO but ultimately answering to Sundar Pichai, that organization would join Waymo, Wing, Google Fiber, DeepMind, and a number of other businesses.
The Justice Department has been looking into claims that Google utilizes its position as an both a broker and auctioneer of digital advertisements improperly to favor itself in business deals at the expense of competitors for a long time. According to the sources, the government is prepared to launch a complaint this summer arguing that Google’s ad-tech tactics are anticompetitive.
According to the WSJ, Google has made another offer to European regulators about YouTube that would permit rivals to act as an intermediary for the sale of ads directly on the video service rather than needing to use Google’s tools.
In a statement, Google says it still wants to be in the advertising business and does not really dispute that it made the offer:
A Google official said in a statement that the company has been working cooperatively with regulators to allay their worries. We have no plans to sell or leave this firm, as we have already stated. Online advertising are now more relevant, there are less costs, and there are more possibilities for publishers and advertisers thanks to fierce competition in ad technology, he continued.