As long as I get my flying exosuit..
I really don't care!
Google CEO Larry Page has quit day-to-day management of the web giant, and made Sundar Pichai chief exec. Page and fellow Google cofounder Sergey Brin, both multibillionaires, will head up a new company called Alphabet, which will wholly own Google. "Sundar has been saying the things I would have said (and sometimes better!) …
Alphabet will run Google's X Lab skunkworks, along with Google's prototype drone delivery service, bio-boffinry base Calico and other advanced projects, including presumably its self-driving cars and its robotics division.
...giving the Google subsidiary immunity from lawsuits resulting from drone and self-driving car lawsuits.
Which is the real reason for the creation of Alphabet. There are no legal precedents for lawsuits resulting from misbehavior of these automated drones and cars.
Alex Nussbaum:
I'm not sure about Google, with their slogan: 'Don't be evil.' That's their slogan: 'Don't be evil.' ... Why bring it up? That's suspicious. That's like being on a date and hearing, "Hey, I hope you're having a good time! And don't even think about the possibility of me being a serial killer. Put it out of your mind!"
Up to no good or just some tax shenanigans?
Why choose? Those are not mutually exclusive options :).
From an external perspective I have but two observations:
- it will be interesting to see what happens to the prosecutions galore they have ongoing. I'm not sure what happens to a court case when a company in court changes shape, but I can imagine that not being a good thing for the case. Having said that, I agree that this very much looks like an attempt to isolate capital from the court cases in progress. I guess the lobbying got either too expensive or simply didn't work out.
- who has my data now?
- it will be interesting to see what happens to the prosecutions galore they have ongoing. I'm not sure what happens to a court case when a company in court changes shape, but I can imagine that not being a good thing for the case.
Has no impact on deciding if there were shenanigans going on - the case is pertinent to events in the past from when the case was brought. The interesting bit now will be working out who will be punished, and by how much, if the court decides someone was naughty
It would be quite interesting to see the precise structuring of the company. I'd imagine that previously they could dip into the overseas post-"tax" funds of Google to fund different projects. If Google is now owned by Alphabet, like some of these other cash drains/projects, how does alphabet get money to invest? It'd be easy to say "from the multi-billionaires" but typically such people like to accumulate rather than risk extracted income/wealth and how liquid is their wealth vs how much is effectively sat in a tax haven?
Mostly because I'm not even close to the first to think or publish something about it. The FT's take (and other places) seems to be that they are taking a page out of Warren Buffett's playbook (which is taken from and copied by many others) to create a giant holding company that is the nominal owner, but let the the wholly owned subsidiaries run their own business.
Now, whether they run it the same way Berkshire Hathaway does things or more like the General Electrics of the world remains to be seen. The announcement sounds like Buffett... but that's a man who really could not care less about the day-to-day operations of a company unless he's looking to buy them in the first place. And he's a man who has a nearly 70 year track record of doing just that.
Charles Duell was supposed to have said "Everything that can be invented, has been invented". As it happens, he didn't, but a lot of people still misquote him.
The fact is that we don't know what new ideas people will dream up; or how they will be applied in the future. They only have to hit the jackpot once for hundreds of failed ideas for it to be a successful method of working.
I just heard this a few days ago, and I apologize to the person or program I'm going to paraphrase without credit, but here goes.
Back when I was a kid, the media and movies promised me hoverboards, flying cars, and video calls. Instead what I got 30 years later were mini-computers in my pocket that can make video calls, but are really much better at email, chat, and other things I enjoy. Rather than hoverboards and flying cars, we are very close to self-driving cars, have mostly self-flying planes, and the vast majority of human knowledge is a few searches away on that computer in my pocket. And medical technology is to a point where things that killed most people in the 80s are now survivable and even recoverable.
I think I rather like what actually happened instead of what futurists thought might happen. The only way that we got here was through the liberal and sometimes absolutely insane applications of time and money to problems we either didn't know we had or problems that once were thought insurmountable. The latter alone could take trillions of dollars and billions of hours.
Google is a huge corp dabbling in many things.
If they all feed out of the same bank accounts etc, then a problem in one business unit can bring down everything.
Spinning up an umbrella company with lots of minion companies makes a lot of sense. You can easily contain risk, you can sell off companies, ...
For example, if a fleet of there robocars goes noddy and they end up being sued for billions, it is much easier to contain the damage if the companies are legally firewalled.
This is exactly why conglomerates like 3M consist of many smaller companies.
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How are investors supposed to treat the new company? Either I'm a play-it-safe investor who wants a stable blue-chip advertising company shares, or I'm a reckless risk-taking investor chasing moonshot projects. There really ought to be separate classes of share for the two distinct parts of the business.
Now they have new brochures, new logos, new websites to design for new organizations and new titles and most importantly: get rid of that dammed "do no evil" slogin that everyone keeps quoting back to us every time we do (i.e. get caught doing) slimey things..
Tony Stark is one thing but they must have been more than a teensy bit envious of all the random fun that (real person) Elon Musk is having with his spare cash: magic cars, space rockets, etc.
I wonder how international data protection legislation might deal with other Alphabet companies making use of Google's data farm.
I think the whole point is simply to take the skunkworks out of the ad farm stuff which makes the accounting clearer. Google's been under pressure over this recently. It's clear that Page and Brin want to continue to invest heavily in things that might eventually bring big returns (cars, health, whatever) but investors want their money now so they can spunk it on the The Next Big Thing™.
Data protection legislation is pretty clear on use between associate companies. But I don't see the relevance here.
The ad farm stuff has a limited shelf life. World + Dog is turning on ad blocking software, and measurable ROI is dropping.
It may never drop to zero, but the world of SEO and CPI is past its best days.
I don't think this is ad + skunkworks so much as ad + new thing + new thing + new thing...
When you're a billionaire you can throw cash at researching stuff because it's fun, not because you're desperate for a fast return.
Investors will take a while to catch on, as usual.