Former investment banker Shane Goodwin, who specialized in divestitures, gave several examples of such deals that later resulted in assets being sold back to the original firm, or didn’t achieve their goals. One example was the Sprint-T-Mobile merger that required a divestiture to Dish that was meant to result in a formidable 5G competitor.
The company continues its defense today after Brinkema declined to pause the case amid the funding gap for the DOJ.
Brinkema says this includes the fact that the expected outcome of this trial is a court order that Google could be held in contempt of court over if it breaks, and a long list of other lawsuits it faces. Wouldn’t these things temper Google’s behavior? Goel says Google likely would comply with a court order, but the problem is that it’s nearly impossible to list all the ways Google might later figure out how to advantage itself again.
PubMatic’s Goel said he didn’t have enough information about what a divested AdX would entail or how much it would cost to know if he would buy it. It’s a stark contrast from the search trial, where AI companies and rival search firms leapt at the chance to buy Chrome.
Rajeev Goel, CEO of rival ad exchange PubMatic, testified that he spoke to Google eight months ago about an issue where its advertiser tool wouldn’t buy some publisher inventory through PubMatic’s exchange. Goel said Google told him that was due to a bug they’re working to fix. Assuming that’s true, he said, Google still stands to make more money if it deprioritizes a fix.
Google executive Nirmal Jayaram, who previously worked on Google’s advertiser tools, warned that a divestiture would likely degrade products for advertisers, and lead more of them to move from open web display ads to other formats that give them a greater return on their investments.
That’s how Google Ad Manager engineering director Glenn Berntson described the difference between a divestiture of AdX that excludes Google’s proprietary infrastructure versus one that includes it. Both are huge undertakings, he said.
Brinkema said she’s thinking about whether she needs to consider different classes of publishers, since those of various sizes have different needs. Some small publishers, for example, may make deals with local businesses for advertising, while others may use Google’s tools only for programmatic ads.
Google executives say the products the DOJ seeks to pull apart are global in nature, and span and types outside of this case. Google product management director George Levittw testified that the DOJ’s request would be “the most complicated and risky project that I have seen in my time at Google.”