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G is for Google

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Re: G is for Google

#331

Post by derf_ »

josh2600 wrote: post #22

Is this purely a function of sharding liability across a conglomerate of businesses? It seems like concentrating Google's ad revenue in a smaller, more efficient business unit is a nod to Berkshire Hathaway's method of business. I can't recall this sort of thing happening in my lifetime, so it will be really interesting to see how this plays out. I also wonder how this would be treated if Google didn't have the crazy…

I've seen a lot of comparisons to Berkshire. Not every large conglomerate is Berkshire.

Berkshire is composed of pre-existing businesses that were themselves successful before being purchased. They are not experimental ventures that need to be subsidized. It is exactly the opposite: money is plowed into the strongest businesses. They each generate excess cash, and it is easier to reinvest that cash in some places than others. The conglomerate structure makes it possible to put the cash where it gets the best returns without having to pay taxes or transaction fees.

Alphabet has none of these properties, except the ability to allocate capital tax-free, but they already had that as Google.

Re: G is for Google

#333

Post by zrail »

derf_ wrote: post #331
josh2600 wrote: post #22

Is this purely a function of sharding liability across a conglomerate of businesses? It seems like concentrating Google's ad revenue in a smaller, more efficient business unit is a nod to Berkshire Hathaway's method of business. I can't recall this sort of thing happening in my lifetime, so it will be really interesting to see how this plays out. I also wonder how this would be treated if Google didn't have the crazy…

I've seen a lot of comparisons to Berkshire. Not every large conglomerate is Berkshire. Berkshire is composed of pre-existing businesses that were themselves successful before being purchased. They are not experimental ventures that need to be subsidized. It is exactly the opposite: money is plowed into the strongest businesses. They each generate excess cash, and it is easier to reinvest that cash in some places tha…

Berkshire is pretty explicit about using the firehose of cash that their insurance businesses throw off, as well as the huge amounts of premium float they have, as capital for their other more profitable businesses.

Re: G is for Google

#334

Post by ljk »

mtgx wrote: post #197
ChuckMcM wrote: post #133

Wow, they are doing letters? Really? Letters? Hey is Eric Schmidt still in the building somewhere? Ask him how well Planets worked out for Sun Microsystems. Interesting strategy, hard to second guess from the outside of course. Sun's motivation was to figure out whether the other parts of the company could stand on their own[1], it also makes it less fiscally complicated to discharge an entire group into the void. Th…

I guess Alphabet is meant to be the PG of tech products?

what i thought too http://i.huffpost.com/gen/585370/original.jpg

Re: G is for Google

#335

Post by _delirium »

hyperpallium wrote: post #117

At last, reversing Jobs' advice to combine everything, returning to the original idea of trying lots of things. Maybe 20% time will see a resurgence, too? Bonus: small, separate entities makes it easier to tackle new opportunities (which start small) that wouldn't move the needle for Google - as per Christensen. > We did a lot of things that seemed crazy at the time. Many of those crazy things now have over a billion…

Won't this make it more awkward to do something like 20% time? It sounds like the experimental stuff will be split out from the core "Google" business, and employees will work for either one or the other.

Re: G is for Google

#336

Post by minot »

amyjess wrote: post #279
ChuckMcM wrote: post #230

Earlier quoted context omitted.

Don't misunderstand me, it isn't dislike, its amazement. Some things really do well under multiple companies, think BASF or Siemans where the core that holds them is something common to all the sub-companies. But historically tech companies do not prosper in that model, and generally for a similar reason, there isn't anything in common between the companies except maybe there are smart and talented people working the…

The difference I see is that Google isn't unbundling their core businesses from each other; we're not getting something like Sun splitting SPARC and Solaris. Search, Android, Chrome, YouTube, Maps, etc. are all staying under Google. The stuff that's going under other Alphabet subsidiaries is the stuff that's totally disconnected from Google's core businesses, like Calico, Life Sciences, etc.

Joel Spolsky's Strategy Letter V is something that I think is interesting in this Sun conversation

> Sun is the loose cannon of the computer industry. Unable to see past their raging fear and loathing of Microsoft, they adopt strategies based on anger rather than self-interest. Sun's two strategies are (a) make software a commodity by promoting and developing free software (Star Office, Linux, Apache, Gnome, etc), and (b) make hardware a commodity by promoting Java, with its bytecode architecture and WORA. OK, Sun, pop quiz: when the music stops, where are you going to sit down? Without proprietary advantages in hardware or software, you're going to have to take the commodity price, which barely covers the cost of cheap factories in Guadalajara, not your cushy offices in Silicon Valley.

http://www.joelonsoftware.com/articles/StrategyLetterV.html

By keeping Google as one, presumably around search, Google has a shot at avoiding the same fate.

Re: G is for Google

#338

Post by zrail »

electic wrote: post #253

The most important part of the 8K is how the merger will happen and how stock will be effected or transformed eventually: “Alphabet will initially be a direct, wholly owned subsidiary of Google. Pursuant to the Alphabet Merger, a newly formed entity (“Merger Sub”), a direct, wholly owned subsidiary of Alphabet and an indirect, wholly owned subsidiary of Google, will merge with and into Google, with Google surviving a…

Is that the normal way something like this is structured? It's pretty elegant.

Re: G is for Google

#339

Post by tim333 »

echelon wrote: post #72
rbinv wrote: post #35

From the abc.xyz source code: Sergey and I are seriously in the business of starting new things. Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort http://www.hooli.xyz/" target="_blank" class="hidden-link">.

I wondered if the reorg would have any impact on the stock price. Given this joke, now I really wonder. Are we sure it isn't April 1st? Are we sure this press release isn't a hoax? This is so wild I'm having trouble believing any of it.

>... any impact on the stock price.

It's up 5.88% (or $26bn) in after hours trading.

Re: G is for Google

#340

Post by jeffgreco »

scott_karana wrote: post #325
bsimpson wrote: post #304

Earlier quoted context omitted.

Are there any prominent ventures (aside from YouTube) that aren't being spun out?

The self-driving cars appear to be staying with Google for now. It would also have been nice to see Drive/Docs/Mail split off from Search/Advertising, but that's definitely a pie in the sky dream on my part ;)

I believe self-driving cars are part of Google X, which is now a separate division from Google.
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