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This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. Mergers

This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. Mergers and acquisitions are more interesting because they are often associated with a growth story. We like success. Aswath Damodaran, who teaches corporate finance at NYU Stern, has a bunch of great talks and content about this where he discusses how companies should act their age. When older companies that are no longer paying dividends are moving into a divestiture phase, they restructure and split up. What we are seeing with some of these big tech companies is that they are transitioning from an exciting growth story into an extractive dividend story in a way that's becoming harmful to consumers. That's why we're talking about breaking them up, and thats the line their management will have to walk if they want to maximize the value of the firm to shareholders through the decline.

tehlike 14d ago
I would say google is still in its growth phase, albeit a slower one. Especially with capex spending etc.
- als0 14d ago
  Google is the new IBM. All the signs are there.
  - jojobas 14d ago
    IBM is more than 100 years old, has defined a huge part of how we think about computers, made plenty of its employees and workers of the wider field rich, has sold many businesses it considered distracting, and is still worth $200B+. Anyone saying "IBM" in the sense of "stagnant failure" is delusional.
    - tucnak 14d ago
      Not to mention they are still at the forefront of materials science and industrial design, and just so happen to manufacture bespoke CPU & server platforms that run circles around all the hyperscalers...
      - bigfatkitten 14d ago
        Though of late, IBM has apparently decided it should be just another Indian outsourcer.
        cindyllm 14d ago
        [dead]
        tucnak 14d ago
        Google will do the same eventually.
    - tehlike 14d ago
      I don't think this is what I respoded to. We cannot deny IBMs contribution, just like we can't deny google's. But where they are in their life as a company is a different question. IBM is beyond growth phase. May even be on the decline phase. My point is Google is still in its growth phase, still inventing, growing, etc.
majormajor 14d ago
This is true, I'd go much further than the OP here and say the barrier for merger should be MUCH higher than the barrier for spin-out or split. There's no shortage of obvious problems that can arise from concentration of influence and control over a market. So just try to prevent it. Trade some max efficiency for redundancy + anti-corruption/pro-competition/pro-consumer market forces.
- mastermage 14d ago
  100% we do not need one company that makes everything hi there Samsung.
  - mschuster91 14d ago
    Conglomerates may not be as nimble and agile as single-focus companies, but they are uniquely more resilient to economic shock events, and branches being "unprofitable" for a time can be supported by others. Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.
    - airstrike 14d ago
      Conglomerates aren't a strictly optimal form of organization. They are more resilient, but they are also massively bureaucratic and can lose their focus. They may also be able to exert a disproportionate amount of leverage on vendors and suppliers. I'm not saying infinitely asset-light companies are strictly superior either. I'm saying there's no silver bullet or free lunch here. If you look at it from one layer above, capital markets that enable the continuous recycling of corporate structures into smaller or larger as needed are more resilient than those in which company structures are ossified. Of course not every deal is for the better. But no M&A isn't good either. Speaking as a former Wall St M&A banker.
  - 14d ago
lotsofpulp 14d ago
>What we are seeing with some of these big tech companies is that they are transitioning from an exciting growth story into an extractive dividend story in a way that's becoming harmful to consumers. Alphabet is rolling out autonomous driving vehicles in many cities around the USA, potentially getting rid of the need to drive a car in 90% of today's use cases. How is this not still an exciting growth story? My kids might never need to drive a vehicle, even though we live in a car dependent suburb.
- fsh 14d ago
  Some cute tech projects do not justify a massive monopoly. Google is financing Waymo using the ~300 billion dollar it extracts annually from consumers via ad spending. I would rather pay substantially less on anything I buy, and have the free market sort out self-driving cars.
  - lotsofpulp 14d ago
    A product/service that can drastically reduce the top cause of injury and death, as well as give safe mobility to so many who do not currently have it is not a "cute tech project". >I would rather pay substantially less on anything I buy, and have the free market sort out self-driving cars. Alphabet's entire revenue divided by the total amount of goods and services sold is miniscule, so I don't see how it could be mathematically possible to pay substantially less on anything you buy. >and have the free market sort out self-driving cars. This is the free market sorting out self-driving cars.
    - fsh 14d ago
      Google is one of many monopolies that are collectively bleeding society dry. Of course, the others should be broken up as well. Waymo is currently financed by a monopolist and has negligible revenue itself, so it is not part of the free market.
    - franga2000 14d ago
      Self-driving cars are an absurdly inefficient way to reduce traffic deaths that exists only because it makes substantially more money for shareholders than the alternatives. You are being witheld a good and cheap solution now for the promise of a worse and expensive solution some time in the future. All the while people keep dying. Oh, and what's this "those who don't have it" bullshit? If anything, turning driving into a subscription service will mean mobility becomes harder for many people, as dirt-cheap used cars slowly stop being available. As for people who can't drive for whatever reason, they already have taxi apps. And don't think for a second that self-driving taxis will be cheaper in the long term than regular ones, only the margins will go up.
NuclearPM 14d ago
> This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. That’s condescending and wrong. Mergers and acquisitions are hundreds of times more common than spinoffs.

tehlike 14d ago

I would say google is still in its growth phase, albeit a slower one. Especially with capex spending etc.

als0 14d ago
Google is the new IBM. All the signs are there.
- jojobas 14d ago
  IBM is more than 100 years old, has defined a huge part of how we think about computers, made plenty of its employees and workers of the wider field rich, has sold many businesses it considered distracting, and is still worth $200B+. Anyone saying "IBM" in the sense of "stagnant failure" is delusional.
  - tucnak 14d ago
    Not to mention they are still at the forefront of materials science and industrial design, and just so happen to manufacture bespoke CPU & server platforms that run circles around all the hyperscalers...
    - bigfatkitten 14d ago
      Though of late, IBM has apparently decided it should be just another Indian outsourcer.
      - cindyllm 14d ago
        [dead]
      - tucnak 14d ago
        Google will do the same eventually.
  - tehlike 14d ago
    I don't think this is what I respoded to. We cannot deny IBMs contribution, just like we can't deny google's. But where they are in their life as a company is a different question. IBM is beyond growth phase. May even be on the decline phase. My point is Google is still in its growth phase, still inventing, growing, etc.

majormajor 14d ago

This is true, I'd go much further than the OP here and say the barrier for merger should be MUCH higher than the barrier for spin-out or split. There's no shortage of obvious problems that can arise from concentration of influence and control over a market. So just try to prevent it. Trade some max efficiency for redundancy + anti-corruption/pro-competition/pro-consumer market forces.

mastermage 14d ago
100% we do not need one company that makes everything hi there Samsung.
- mschuster91 14d ago
  Conglomerates may not be as nimble and agile as single-focus companies, but they are uniquely more resilient to economic shock events, and branches being "unprofitable" for a time can be supported by others. Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.
  - airstrike 14d ago
    Conglomerates aren't a strictly optimal form of organization. They are more resilient, but they are also massively bureaucratic and can lose their focus. They may also be able to exert a disproportionate amount of leverage on vendors and suppliers. I'm not saying infinitely asset-light companies are strictly superior either. I'm saying there's no silver bullet or free lunch here. If you look at it from one layer above, capital markets that enable the continuous recycling of corporate structures into smaller or larger as needed are more resilient than those in which company structures are ossified. Of course not every deal is for the better. But no M&A isn't good either. Speaking as a former Wall St M&A banker.
- 14d ago

lotsofpulp 14d ago

>What we are seeing with some of these big tech companies is that they are transitioning from an exciting growth story into an extractive dividend story in a way that's becoming harmful to consumers. Alphabet is rolling out autonomous driving vehicles in many cities around the USA, potentially getting rid of the need to drive a car in 90% of today's use cases. How is this not still an exciting growth story? My kids might never need to drive a vehicle, even though we live in a car dependent suburb.

fsh 14d ago
Some cute tech projects do not justify a massive monopoly. Google is financing Waymo using the ~300 billion dollar it extracts annually from consumers via ad spending. I would rather pay substantially less on anything I buy, and have the free market sort out self-driving cars.
- lotsofpulp 14d ago
  A product/service that can drastically reduce the top cause of injury and death, as well as give safe mobility to so many who do not currently have it is not a "cute tech project". >I would rather pay substantially less on anything I buy, and have the free market sort out self-driving cars. Alphabet's entire revenue divided by the total amount of goods and services sold is miniscule, so I don't see how it could be mathematically possible to pay substantially less on anything you buy. >and have the free market sort out self-driving cars. This is the free market sorting out self-driving cars.
  - fsh 14d ago
    Google is one of many monopolies that are collectively bleeding society dry. Of course, the others should be broken up as well. Waymo is currently financed by a monopolist and has negligible revenue itself, so it is not part of the free market.
  - franga2000 14d ago
    Self-driving cars are an absurdly inefficient way to reduce traffic deaths that exists only because it makes substantially more money for shareholders than the alternatives. You are being witheld a good and cheap solution now for the promise of a worse and expensive solution some time in the future. All the while people keep dying. Oh, and what's this "those who don't have it" bullshit? If anything, turning driving into a subscription service will mean mobility becomes harder for many people, as dirt-cheap used cars slowly stop being available. As for people who can't drive for whatever reason, they already have taxi apps. And don't think for a second that self-driving taxis will be cheaper in the long term than regular ones, only the margins will go up.

NuclearPM 14d ago

> This point of view has more to do with your information diet than it does with reality. Companies un-merge and spin out all the time, for many reasons. That’s condescending and wrong. Mergers and acquisitions are hundreds of times more common than spinoffs.