Google splits into GOOG and GOOGL today • Hacker News Board

Re: Google splits into GOOG and GOOGL today

#31

Post by fiatmoney » Thu, Apr 03, 2014, 2:40 AM UTC

Klinky wrote: post #22

fiatmoney wrote: post #18

"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.

Shareholder accountability is pretty much bogus. The only shareholders who have ever had a real say are those who owned vast quantities. The flood of blind investing through retirement funds has further diluted shareholder influence to little more than demanding increasing share price.

Large institutional investors like mutual funds, pension funds, etc. have at least some of their incentives aligned with their own investors - they want the value of their holdings to go up (to increase management fees), which means exercising some level of corporate governance. For instance, looking askance at value-destroying vanity purchases (arguably, Oculus being the latest example).

Even this minimal level of oversight isn't possible when they have no voting rights worth mentioning.

Re: Google splits into GOOG and GOOGL today

#32

Post by fiatmoney » Thu, Apr 03, 2014, 2:43 AM UTC

snowwrestler wrote: post #30

fiatmoney wrote: post #18

"Ownership" without control gives you precisely nothing, except for perhaps standing in a shareholder lawsuit. A company being unaccountable to its investors should make it unattractive as an investment.

> Oddly, no previous management research has looked at what the legal literature says about the topic, so we conducted a systematic analysis of a century’s worth of legal theory and precedent. It turns out that the law provides a surprisingly clear answer: Shareholders do not own the corporation, which is an autonomous legal person. What’s more, when directors go against shareholder wishes—even when a loss in value i…

Right. "Ownership" is a really fuzzy thing; in the context of owning shares of a public corporation it gives you the right to be treated equally (in some senses) with other shareholders, standing for shareholder lawsuits alleging breach of fiduciary duty, and most importantly the right to select the board and vote on certain proposals.

No voting rights takes away the most important component.

Re: Google splits into GOOG and GOOGL today

#33

Post by thrownaway2424 » Thu, Apr 03, 2014, 2:49 AM UTC

jacques_chester wrote: post #20

ajcarpy2005 wrote: post #9

There seems to be a push to diversify and expand Google's income recently. Google Play Music All Access, Google Helpouts (20% cut), this stock change, Google fiber (while competitively priced, I expect there will be long-term profits), Google Glass, etc. I have been noticing this and assume it's meant to help them fund their robotic and autonomous car projects. These are likely capital-intensive segments of the compa…

Google have been trying to find something apart from advertising since pretty much day dot. It's a strategy pioneered by Microsoft, I call it "spaghetti cannon". Turn your free cashflow into spaghetti, fire it at a wall, hope something sticks. It's sorta-kinda worked for MS. They have 4 or 5 distinct lines of business, each of which could qualify as an F500 alone. Google don't have that. They have 1, and only 1, line…

Google has multiple billion-dollar business lines. But mostly they have been effective in building products that drive revenue to the main one.

Re: Google splits into GOOG and GOOGL today

#34

Post by clarky07 » Thu, Apr 03, 2014, 2:49 AM UTC

Ellipsis753 wrote: post #27

jacques_chester wrote: post #20

Earlier quoted context omitted.

Google have been trying to find something apart from advertising since pretty much day dot. It's a strategy pioneered by Microsoft, I call it "spaghetti cannon". Turn your free cashflow into spaghetti, fire it at a wall, hope something sticks. It's sorta-kinda worked for MS. They have 4 or 5 distinct lines of business, each of which could qualify as an F500 alone. Google don't have that. They have 1, and only 1, line…

Well I wouldn't say they have only a single line of business. Yes, they make pretty much all of their profits from advertising. However they no longer just do searches. They do email, file hosting etc. You name it and they probably do it. They do make money from ways other than advertising too. They have quite a few pay to use services. Like business emails or Google Drive.

and yet none of them make money except search advertising. it's almost all of their revenue on a percentage basis.

edit: i do believe they make a bit of money with youtube now, but it is still advertising. they haven't successfully SOLD anything to date.

Re: Google splits into GOOG and GOOGL today

#35

Post by clarky07 » Thu, Apr 03, 2014, 2:53 AM UTC

bane wrote: post #28

jacques_chester wrote: post #20

Earlier quoted context omitted.

Google have been trying to find something apart from advertising since pretty much day dot. It's a strategy pioneered by Microsoft, I call it "spaghetti cannon". Turn your free cashflow into spaghetti, fire it at a wall, hope something sticks. It's sorta-kinda worked for MS. They have 4 or 5 distinct lines of business, each of which could qualify as an F500 alone. Google don't have that. They have 1, and only 1, line…

I do wonder sometimes what Android could have meant to them if they had kept it more close hold and made and sold their own devices. Sure they got lots of other companies to do the expensive hardware R&D, manufacture and marketing, but in the end, what's a multi-billion dollar market in devices is still just a funnel into line-of-business #1.

not only that, but they already had that funnel wrapped up with their partnership with apple. this only gave them slightly more control over the funnel, with no real profits to show for it, while hurting apple (which from a google perspective might be worthwhile in and of itself? I'm not sure apple had any plans to go into search, but maybe).

Re: Google splits into GOOG and GOOGL today

#36

Post by yeukhon » Thu, Apr 03, 2014, 2:59 AM UTC

bane wrote: post #28

jacques_chester wrote: post #20

Earlier quoted context omitted.

Google have been trying to find something apart from advertising since pretty much day dot. It's a strategy pioneered by Microsoft, I call it "spaghetti cannon". Turn your free cashflow into spaghetti, fire it at a wall, hope something sticks. It's sorta-kinda worked for MS. They have 4 or 5 distinct lines of business, each of which could qualify as an F500 alone. Google don't have that. They have 1, and only 1, line…

I do wonder sometimes what Android could have meant to them if they had kept it more close hold and made and sold their own devices. Sure they got lots of other companies to do the expensive hardware R&D, manufacture and marketing, but in the end, what's a multi-billion dollar market in devices is still just a funnel into line-of-business #1.

Hardware is a hard battle.

Windows and Office have locked users in for many years. But hardware cannot. Many years ago I was a Dell user, then I am now a Mac user. A few years back I was Nokia and then Sony Ericson and then Samsung, Motorola and now Apple. I think Google made a smart move to only make very limited hardware product on their own.

Re: Google splits into GOOG and GOOGL today

#37

Post by guyzero » Thu, Apr 03, 2014, 3:00 AM UTC

drcode wrote: post #6

wtracy wrote: post #3

Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.

Yes, and Google has committed to pay an extra dividend if the prices diverge too much, because laws.

because lawsuits.

Re: Google splits into GOOG and GOOGL today

#38

Post by bbanyc » Thu, Apr 03, 2014, 3:00 AM UTC

laxatives wrote: post #25

wtracy wrote: post #3

Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.

Has a company done something like this before? I've heard of some having a stock that sells for orders of magnitude higher/lower, but not for the same price.

News Corp has a structure like that (NWS/NWSA), as does its spinoff 21st Century Fox (FOX/FOXA).

Re: Google splits into GOOG and GOOGL today

#39

Post by guyzero » Thu, Apr 03, 2014, 3:03 AM UTC

laxatives wrote: post #25

wtracy wrote: post #3

Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.

Has a company done something like this before? I've heard of some having a stock that sells for orders of magnitude higher/lower, but not for the same price.

Sure. 21st Century Fox has FOX and FOXA. There are lots of others but I can't find a comprehensive list for whatever reason.

Re: Google splits into GOOG and GOOGL today

#40

Post by caf » Thu, Apr 03, 2014, 3:15 AM UTC

laxatives wrote: post #25

wtracy wrote: post #3

Does this imply that GOOG and GOOGL shares will have prices that will move independently going forward? This should be interesting to watch.

Has a company done something like this before? I've heard of some having a stock that sells for orders of magnitude higher/lower, but not for the same price.

News Corporation has about 379 million non-voting A-class shares and 200 million voting B-class shares on issue.