471–480 of 607 posts
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Fiber is the hint about what this really means. Capital intense businesses like ISPs or car companies are expensive to operate and the financials would drag down Google. In this model, the big shareholders get to dilute risks in these ventures, while retaining the ability to exponentially increase their personal wealth.
I don't think there would be a difference on financials. Alphabet is worth exactly as the old Google, and is currently operating exact same businesses. Separating Fiber is important for other reasons, most notably, saving themselves from conflict of interest/anti-trust lawsuits.
I really wonder about this though. Conglomerates have a mixed track record [1] and from where I sit, it's not clear Larry/Sergey are better capital allocators than the public markets.
[1] Brealey & Myers "Corporate Finance" has a good section on this topic, comparing big Asian conglomerates like Samsung, LG, Yahama, etc. to American public companies over time.
Earlier quoted context omitted.
Fiber is the hint about what this really means. Capital intense businesses like ISPs or car companies are expensive to operate and the financials would drag down Google. In this model, the big shareholders get to dilute risks in these ventures, while retaining the ability to exponentially increase their personal wealth.
I don't think there would be a difference on financials. Alphabet is worth exactly as the old Google, and is currently operating exact same businesses. Separating Fiber is important for other reasons, most notably, saving themselves from conflict of interest/anti-trust lawsuits.
If this was in preparation for spinning Fiber off, sure.
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I find it also interesting the non - Google companies: Businesses such as Calico, Nest, and Fiber, as well as its investing arms, such as Google Ventures and Google Capital, and incubator projects, such as Google X, will be managed separately from the Google business. Fiber is the most notable to me - seems they see this as more than an experiment and are looking to expand. YouTube not separating is an interesting on…
I interpret it as keeping the ad machine separate from everything else. If product decision impact ad revenue, they stay in (G)oogle. Everything else moves to different arms. My guess is this serves 3 benefits: 1 - Less turf wars. 2 - Better visibility to investors on where the money is. 3 - Ability to spin off pieces as needed. Many companies resist this type of visibility because they don't want a Carl Icahn to com…
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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…
Awesome insight and backstory about one of SV's iconic companies, so thanks for sharing. Maybe the new Alphabet structure, despite similar failures at Sun and other tech companies, is the best option for maximizing innovation even though it also carries a high probability of failure (an "alpha" bet if you will, hah). Or maybe they did devise an ingenious scheme to neutralize the shortcomings of the Planets model, but…
Google you're drunk, go home. Ok more seriously as a customer: uh, what the hell just happened? "Hey you know that great brand we had? Yeah lets pivot towards ... letters. That children learn"
So I normally don't comment on downvotes because, you know, whatever, but I'm really looking forward to the posts about how this is a great idea. "Hey you know how we had this brand that became synonymous with looking up all information ever? Let's abandon that to be associated with, uh, letters." Seriously it's not like "google" was a damaged brand. I'm not going to "alphabet" shit.