With rumors swirling about Google possibly partnering up with online-gaming company, Zynga, stockholder value may be in jeopardy.
Every recent deal, from energy trading to mobile advertising has put Google on regulators' radars. Anti-trust investigations seem to come with every new venture that Google takes on. Both here and abroad. We think if their growth into other markets continue to be dominant, the government (or EU commission) may rule that it's gotten too big.
So what will be the straw that breaks the camel's back? Will it be another acquisition? Or, will it be Google venturing out on its own?
The answers to these questions are virtually irrelevant. How an anti-trust suit will affect stockholder portfolio, is. If Google is ever ruled against in a suit of this caliber, stock traders will see an effect similar to when Microsoft was told to sell its assets. While, we don't see this as a problem looming over the company's head. We definitely see it as a near future possibility at the rate Google is growing.
A move into the online gaming field isn't the red flag that investors should be looking for. However, if you look at the last 18 months: you'll see ventures into energy trading, mobile advertising, travel (not to mention in-house location based services as well as operating systems), and now rumors of online gaming. We don't have holdings in Google but we wanted to write an article for those of you that do. Stay alert. Google is a great and innovative company. However, if it is deemed anti-competitive, investors may change their minds about investing in their stock for the long haul.
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