Motley Fool Money: "Google Faces a Potential Breakup"

Released on April 22, 2025

Hosts: Dylan Lewis, Ricky Mulvey, and Mary Long
Guest: Jason Moser

1. Google’s Antitrust Battle: The Potential Breakup of Alphabet

The episode kicks off with host Ricky Mulvey delving into the escalating antitrust case against Google. Last year, a U.S. District Judge declared that Google holds an illegal monopoly in online search, primarily due to its lucrative deals, such as the billions paid to Apple to remain the default search engine. The Department of Justice (DOJ) is now pushing for significant changes, including:

• Selling Chrome: Google Chrome dominates the global browser market with a 66% user share. Jason Moser comments, “I think selling Chrome would be a real attention getter” (01:44) but doubts its feasibility.

• Terminating Default Search Agreements: The DOJ demands Google end its exclusivity contracts with companies like Apple and share its data with competitors. Moser elaborates, “Google's pretty darn good... Data is quite valuable... But money doesn't solve the entire problem” (02:30).

• Impact on Alphabet: If these remedies are enforced, Alphabet could face significant structural changes. Moser suggests that while terminating agreements might foster competition, the complete breakup (like selling Chrome) is unlikely.

Notable Quote:

"Google pays billions and billions of dollars to be the default search engine on Apple... This helped make the company a monopoly in online search." – Ricky Mulvey (01:44)

2. The Evolving Search Landscape: ChatGPT and Competition

Mulvey highlights the emergence of ChatGPT as a competitor impacting Google’s dominance. He notes, “Now you have ChatGPT eating a little bit of Google's lunch within the search landscape” (03:18). Moser acknowledges Google’s advancements with its AI tool, Gemini, but emphasizes the challenges in breaking entrenched user habits.

Notable Quote:

“...if we just give our data to everyone, then yes, you could go out and build the next Google.” – Jason Moser (04:06)

3. Ripple Effects in Big Tech: Beyond Google

The discussion extends to the broader implications for big tech companies under antitrust scrutiny. Moser observes, “These are the signs that big tech is really under the microscope” (05:38), suggesting that other giants like Meta might soon face similar examinations.

Notable Quote:

“Big tech is really under the microscope... we’ll probably see them come under, under the microscope here in the near future.” – Jason Moser (05:38)

4. General Motors’ $35 Billion EV Bet in a Turbulent Political Climate

Transitioning to the automotive sector, Mulvey presents a BusinessWeek headline on GM's $35 billion investment in electric vehicles (EVs). He outlines three perspectives:

• Sales Growth: GM is doubling its EV sales, capturing more market share from Tesla.
• Political Challenges: Navigating unfavorable incentives and lobbying, especially in states like Colorado.
• Sustaining Losses: GM continues to sell EVs at a loss to establish market presence.

Moser commends GM’s innovation, particularly their Ultium battery technology, but expresses skepticism about the sustainability of selling EVs at a loss long-term.

Notable Quote:

“What these companies are really trying to get EVs out in the market... you start to realize a little bit more pricing power as things progress.” – Jason Moser (08:58)

5. Tesla’s Market Perception and GM’s Strategic Advantage

The hosts discuss Tesla's fluctuating market perception due to Elon Musk’s increasing political divisiveness. A recent CNBC poll indicates a significant rise in negative views towards Tesla, which Moser correlates with GM's surge in EV market share.

Notable Quote:

“Half of Americans now hold a negative view toward Tesla... Musk's actions... have had an impact on the business.” – Jason Moser (11:25)

Moser praises Mary Barra’s leadership at GM, highlighting her vision for a diversified vehicle lineup to cater to varying consumer preferences.

6. Hertz’s Stock Surge and Bill Ackman’s Investment Strategy

The conversation shifts to Hertz, whose stock has surged nearly 150% amid Bill Ackman’s hedge fund acquisition of a 20% stake. Despite challenges like declining international tourism and substantial debt, Ackman sees potential in Hertz’s turnaround.

Moser explains Ackman’s strategy: recovering from poor past decisions (like investing heavily in Teslas), stabilizing leadership, and leveraging staggered debt repayments to provide financial flexibility.

Notable Quote:

“This stock has taken off. My suspicion is this isn't a company that he plans to hold on to for a long, long time.” – Jason Moser (15:50)

7. Listener Q&A: Navigating Tariffs, Retirement Accounts, and More

The episode transitions into a Q&A segment where Robert Brokamp addresses listener questions:

• Tariffs and Their Allocation: Explains that tariffs are collected by the U.S. Customs and Border Protection (CBP) and funneled into the U.S. Treasury's General Fund, supporting various governmental expenditures.

  Notable Quote:

  “The tariff is paid by the company that imports the goods... It gets collected by CBP and then it gets sent to the U.S. treasury.” – Robert Brokamp (18:49)

• Backdoor Roth IRA: Advises on using backdoor Roth IRAs for those exceeding Roth IRA income limits, cautioning about the pro rata rules that can affect tax liabilities if traditional IRA balances exist.

  Notable Quote:

  “If you want to jump in, more power to you. But he's got a big head start.” – Jason Moser (16:21)

• Grandparent Roth IRAs vs. 529 Plans: Discusses the complexities and advantages of grandparents contributing to a grandchild’s Roth IRA versus traditional 529 college savings plans, recommending the latter for its tax benefits and financial aid considerations.

  Notable Quote:

  “Grandparent owned 529, it's kind of invisible when it comes to financial aid...” – Robert Brokamp (25:42)

• Origin of the 401(k): Provides a historical perspective on the creation of the 401(k) plan, highlighting Ted Benna’s pivotal role and the shift from traditional pensions to defined contribution plans due to cost and complexity.

  Notable Quote:

  “It's easier for a company to say... give you some money and then you do with it what you want.” – Robert Brokamp (26:20)

• Capital Accumulation Plans: Explains these less common retirement accounts, similar to 401(k)s, often found in specific industries like the NFL, emphasizing the importance of understanding plan specifics.

  Notable Quote:

  “Definitely dig into the details of your plan so you know how to make the most of it.” – Robert Brokamp (29:56)

Conclusion

Ricky Mulvey wraps up the episode by reminding listeners to conduct their own research before making investment decisions and emphasizing the importance of adhering to personal finance best practices. The episode provides comprehensive insights into major tech antitrust issues, the evolving EV market, and strategic investment opportunities, along with practical financial advice through the Q&A segment.

Timestamp References:

• 01:44: Discussion on DOJ’s antitrust demands against Google.
• 02:30: Jason Moser’s thoughts on terminating search agreements.
• 03:18: Impact of ChatGPT on Google’s market.
• 04:06: Google’s data sharing and competition.
• 05:38: Broader antitrust implications for big tech.
• 08:58: GM’s EV strategy and market positioning.
• 11:25: Tesla’s market perception and GM’s advantage.
• 15:50: Hertz’s stock surge and Ackman’s strategy.
• 16:21: Backdoor Roth IRA insights.
• 18:49: Explanation of tariffs and their allocation.
• 25:42: Grandparent 529 plans and financial aid.
• 26:20: Origin of the 401(k) and shift from pensions.
• 29:56: Capital accumulation plans and retirement accounts.

This summary is intended for informational purposes and does not constitute financial advice. Always consult with a financial professional before making investment decisions.