Google shocked the tech world today with their filing for bankruptcy protection under Chapter 11. In a statement just released, Sundar Pichai, CEO of Google, stated that “We had not released this, but our efforts to bring high-speed Internet to everyone have been extremely costly and not profitable. This put such a drain on the company that it has brought us to bankruptcy. However, we hope to restructure, shed the money-losing Internet service, and continue in business.”
Other company executives told us privately that Google service was just no match for the high-quality companies operating in the ISP space, such as Verizon, AT&T, Time Warner Cable and Charter Communications. These companies are so well regarded by their customers that Google was simply unable to sell enough of their own Internet services to be profitable, and it ultimately dragged down the entire company.
The announcement, coming on a day when financial markets are closed, did not affect share prices. Suspension of trading in Google stock on Monday is expected, until more details of the bankruptcy are understood. Needless to say, stockholders can expect to receive a substantial haircut on the value of their holdings.