Thirteen years ago Microsoft (Nasdaq: MSFT) ruled the stock world.
In 1999, at the height of the dot-com boom, Microsoft became the first-ever company to achieve a $600 billion valuation. By the turn of the century, the company reached an apex of a $619 billion valuation – an unfathomable number at the time. Shares of the powerful tech stock reached an all-time high of nearly $59.
But it was around that time that Microsoft lost a lawsuit in which Federal regulators came after Microsoft for abusing monopoly power by bundling its Internet Explorer and Microsoft Windows web browsing systems. In November 1999, a judge ruled that Microsoft was indeed in violation of monopoly laws.
The company lost its vice grip on the burgeoning dot-com landscape, and within a year the stock had plummeted all the way to $21 a share. The stock hasn’t risen much in the 12-plus years since, trading at just under $32 a share as the market closed today. Its market cap is now a comparatively paltry $268 billion.
Now Google (Nasdaq: GOOG) could be facing a similar situation.
The Wall Street Journal reported yesterday that a federal investigation into whether Google is violating antitrust laws is escalating. The Federal Trade Commission is investigating whether the search-engine giant is manipulating its search results so that competing companies have a harder time appearing at the top of a search results page.
No formal case has been brought. But there are rumblings that a lawsuit is imminent. And that would be very bad news for Google – currently the 11th-richest publicly traded company in the world by market cap.
If it’s anything like the Microsoft monopoly case 13 years ago, this might not end well for Google stock.