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Alphabet Loses $859M on 'Moonshots' in 2Q 2016

nytimes.com

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Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#111

Post by drawkbox »

zaroth wrote: post #33

I don't think it's right to equate R&D spending with "losses". Google makes a profit, not a loss, so technically it does not have losses. It has expenses, and among those, investments in future technology. If all Google could do with their cash flow was pay a dividend, that would be very sad, and it would call for a much lower P/E ratio. This article completely misstates the facts. Perhaps the way they break out thei…

I agree the market has a hard time justifying R&D and that is a problem. That is why small companies/startups can disrupt and innovate faster.

Another way is like Amazon, they just spend all the profit back on R&D and prevent much of this profit/growth talk, it stays focused on competition and future goals. They are in a constant state of R&D by reinvesting profit.

Spending on R&D should be seen as good in a tech world where you must stay ahead, not as losses. If you are a big tech company and not spending on R&D, expect that to be short-lived.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#112

Post by Lordarminius »

redthrowaway wrote: post #81
jahnu wrote: post #71

Earlier quoted context omitted.

They mastered search. They mastered mapping.

Search has stagnated. Google has gotten scarily good at anticipating what I want to know, but conspicuously bad at answering hard questions. There's tons of room for improvement. Similarly, Google Maps has added features that make it a better map, and it's a great place to find what time a store closes and what their phone number is. But it's been essentially the same service, with iterative improvements, for years.…

>Search has stagnated. Google has gotten...

Who downvoted this and why?

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#113

Post by AnAfrican »

taneq wrote: post #79
ktRolster wrote: post #66

Earlier quoted context omitted.

>I don't think it's right to equate R&D spending with "losses" Especially since they are still working on them. Can't really call them a loss if it turns into billions in the next few years. Better to say "Alphabet spent $859M on...."

Maybe even "Alphabet invested $859M..."

In some contexts, not all Spending is Investment even if it can be defined as investment in layman terms.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#114

Post by Mtinie »

AnAfrican wrote: post #113
taneq wrote: post #79

Earlier quoted context omitted.

Maybe even "Alphabet invested $859M..."

In some contexts, not all Spending is Investment even if it can be defined as investment in layman terms.

Can you provide an example? I would not consider reasonable overhead costs to be "investment" dollars, but you may have something else in mind.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#115

Post by melling »

zaroth wrote: post #33

I don't think it's right to equate R&D spending with "losses". Google makes a profit, not a loss, so technically it does not have losses. It has expenses, and among those, investments in future technology. If all Google could do with their cash flow was pay a dividend, that would be very sad, and it would call for a much lower P/E ratio. This article completely misstates the facts. Perhaps the way they break out thei…

Company X invests billions into the "future". This continues for 5-10 years without results turning into profitable products or direct improvements. Shareholders begin to question the value of those investments. "Is the R&D being well spent?" Google hasn't turned any moonshot into a profitable product yet, right? They're going to need a winner or two to convince investors.

Apple will be in the same position in a few years because they are ramping up R&D.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#116

Post by corecoder »

usrusr wrote: post #86
bitL wrote: post #55

Earlier quoted context omitted.

Moonshots are called that way because they bear both immense risk of failure as well as a potential to bring in billions. So individual moonshots are almost always failures; the ones that are successful pay the other ones. Google is doing the right thing to remain alive in the future without enforcing lock down on their users (like other companies not producing moonshots do).

> Moonshots are called that way because they bear both immense risk of failure as well as a potential to bring in billions. Which is kind of funny because the original moonshot was a rather predictable thing (build bigger rockets until one is big enough) and success only meant that you could stop spending billions.

Well, predictable in the sense that they would either reach the Moon and come back, or reach the Moon and die trying to come back, or reach the Moon and die there, or die along the way to the Moon, or explode in the air, or explode on the ground.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#117

Post by bachback »

adventured wrote: post #105
bachback wrote: post #88

Earlier quoted context omitted.

yes, absolutely. they do have 75B$ in cash and another 60B$ in short-term investments. So they have 135B$ to spend. judged by that number Google is too conservative.

That's incorrect. They have $75 billion in total 'cash.' $15 billion is listed as cash and $60 billion is listed as short-term investments (as of Q1 2016). http://finance.yahoo.com/quote/GOOGL/financials?p=GOOGL

right, thanks. 90B$ in current assets and 150B$ in total book value.

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#118

Post by graycat »

For the project for real, actual moonshots, we knew in quite good terms right at the beginning that the project was doable. Same for the Manhattan project. Same for GPS. Same for the SR-71.

So, right, there is a methodology. Get very far from that methodology and tend to get failed projects.

Sure, on some par 3 hole, there are a lot of hole in one shots, and only a small fraction are made by expert golfers with the rest from luck. Still, if picking someone to make a hole in one, pick an expert!

Sure, with luck, might get another successful mobile, social, local, sharing app, but luck is not very reliable!

Re: Alphabet Loses $859M on 'Moonshots' in 2Q 2016

#120

Post by whack »

zaroth wrote: post #33

I don't think it's right to equate R&D spending with "losses". Google makes a profit, not a loss, so technically it does not have losses. It has expenses, and among those, investments in future technology. If all Google could do with their cash flow was pay a dividend, that would be very sad, and it would call for a much lower P/E ratio. This article completely misstates the facts. Perhaps the way they break out thei…

Genuine question: Has Google ever achieved financial success with a moonshot project?

Google Glass seems to have come closest to becoming an actual product, but it eventually crashed and burned as well.

The self-driving car was a great technological success, but I really wonder how Google plans to monetize it. Years ago, when Google was the only major company doing self-driving-cars, there was a lot of buzz and potential. But they didn't seem to capitalize on that in any way. Now that Tesla and every other major car company has achieved near-parity, I really wonder what Google's end-game is for self-driving cars.

In general, a lot of these moonshot projects sound so zany, that I wonder if the division will ever recoup its investment.

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