An Open Letter to Sundar Pichai
Mr. Pichai,
I have owned Alphabet stock (GOOG) for years but recently reduced my position greatly. I also own a small position through proxy funds.
I am not smarter than you or anyone on your board. And I am certain you have had a plan in place to address your current situation with the DOJ for years. As a shareholder, I would like to offer my thoughts -
Please scrap that plan and do the following.
Google is famous for ‘cutting bait’ when a product hasn’t reached expectations. That’s what you need to do with your plan. What you need to do is sit down with the most vocal members of whoever is left driving this thing in a month and ask, “What do you want us to do?”
Do you want Warren or (god forbid) Barr telling you how to run a tech biz? Oh, god no. But negotiating a few carve-outs that keep a good synergy between the companies is the least disruptive way for this to end. Politico’s get their win and you will enjoy at least 8 years of uninterrupted ‘doing business as usual’.
If you try to fight this what does a victory look like? Alphabet is stagnant for 4–5 years? No growth just circled wagons. So your legacy isn’t as an innovator, but the guy that was at the top as you got caught up to by a start-up in search, Facebook in ad sales, Apple in mobile, and Twitch in streaming. The DOJ won’t pursue Google and Amazon simultaneously. And if you think Zuckerberg and Bezos won’t be pushing to lap you while you waste time playing antitrust you are wrong.
Here’s the upside……
I referenced the other two a minute ago and I’d like to make a prediction. Facebook will fight to the death. SunTzu said, “Never surround an army on all sides, if they have nowhere to retreat they will fight to the death”. Zuck is Facebook and he won’t be able to act with the agility I am suggesting you do. They will suffer the same market demise I believe you would (if you fight this) and your core business will grow. And grow fast.
End of the day, if you get sucked down the long road trying to win you’ll have to teach Luddite American’s (Senate, Congress) what you do, how you make money and that you aren’t Twitter. If you take my route, the sum of your parts will far exceed your current value in a year. Unless the spun-off co. is CEO’d by Susan. In which case, you are screwed.
