8 ms·

Actually reading the first few paragraphs of the form 8(K) was more illuminating than the blogpost. "Under the new operating structure, its main Google busines

Actually reading the first few paragraphs of the form 8(K) was more illuminating than the blogpost. "Under the new operating structure, its main Google business will include search, ads, maps, apps, YouTube and Android and the related technical infrastructure (the “Google business”)" "In connection with the new operating structure and upon completion of the Alphabet Merger (as defined below), Larry Page will become the Chief Executive Officer (CEO) of Alphabet, Sergey Brin will become the President of Alphabet, Eric E. Schmidt will become the Executive Chairman of Alphabet, Ruth Porat will become the Senior Vice President and Chief Financial Officer (CFO) of Alphabet and David C. Drummond will become the Senior Vice President, Corporate Development, Chief Legal Officer and Secretary of Alphabet. Larry, Sergey, Eric and David will transition to these roles from their respective roles at Google, whereas Ruth will also retain her role as the CFO of Google." http://www.sec.gov/Archives/edgar/data/1288776/000128877615000039/a20150810form8-k.htm http://www.sec.gov/Archives/edgar/data/1288776/0001288776150...

DonHopkins 11y ago
So if Larry Page is King Azaz of Dictionopolis, then who is his mortal enemy, the Mathemagician of Digitopolis? https://en.wikipedia.org/wiki/The_Phantom_Tollbooth https://en.wikipedia.org/wiki/The_Phantom_Tollbooth
yRetsyM 11y ago
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 one to me, I expected that to be separate.
- tenoman 11y ago
  I think the idea was to keep anything related to ad revenue all together under Sundar, and Youtube is definitely a part of that.
  - ariwilson 11y ago
    Or "web services" in general.
    - cptn_brittish 11y ago
      It seems to me that Google is now the software arm and everything else is spun off into its individual niches.
- Spooky23 11y ago
  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.
  - vonmoltke 11y ago
    This reorganization makes no difference on the financials. The release explicitly stated the company is trading at the conglomerate level.
    - S4M 11y ago
      Yes, I guess the ones that are getting affected are the Google (not Alphabet) employees, since now it must be much more complicated for an engineer working on a Google project to be transferred to something more sexy such as the Self Driving Car. Disclaimer: I don't work at Google and don't know anybody who does, so I might be totally off.
      - trhway 11y ago
        i guess the employees will now also get a clear feel who of them is "maker" and who is "taker" :) By the way - who is inheriting the piles of money accumulated in the tax heavens? I think that is another elephant in the room. The GoogleX+Fiber+... is obviously a money hungry black hole, so would they be able now to redirect/invest this money from abroad straight into hat loss generating business without incurring the taxes?
        joshstaiger 11y ago
        Only if it is invested offshore. If it comes back to the US, it will be taxed. Same situation as before.
    - moritzplassnig 11y ago
      It will have an impact - they will break out the Google Financials in Q4 & overall be more transparent about the different projects.
- mathattack 11y ago
  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 come in and demand a spinoff. The share structure of Google/Alphabet precludes this from happening.
  - toomuchtodo 11y ago
    Transparency is easier when you have control (Class A versus Class C shares). I'm surprised more largish tech companies haven't followed along to not be at the whim of WallStreet and other short-term outlook players.
    - mathattack 11y ago
      Here's the thing... Many companies are actually poorly run. For most of them, Wall Street does the dirty work of forcing them to relinquish their money to more productive efforts. (Think of all the bloated monopolies who used to have fleets of corporate jets and crazy perks) No extreme is right or wrong.
    - carbocation 11y ago
      Aren't the Class B shares the major voting shares, with 10x as many votes per share as Class A (10 vs 1)?
      - Bedon292 11y ago
        Correct: Class C - 0 Votes (GOOG) Class A - 1 Vote (GOOGL ~4% higher cost per share) Class B - 10 Votes (Not publicly traded)
        toomuchtodo 11y ago
        Can Class B shares be traded privately between individuals? Or do they have conditions attached (right of first refusal back to founders/company, etc)?
- pkinsky 11y ago
  >Calico A clean line between Calico and the advertising business can only be a good thing. Hopefully this means they can get on with analyzing every genome they can get their hands on.
- JoshTriplett 11y ago
  I wonder if that'll include Google Fi, and if that'll be separate or go into the same subsidiary as Fiber.
deleted 11y ago
[deleted]
downandout 11y ago
What they are really saying with all of this is..."We are moving all of our profitable businesses under one umbrella that will be reported separately, and putting all of our money-losing businesses under another, in hopes that investors will basically ignore the unprofitable stuff and only focus on our profitable businesses.". Apparently the moonshots are diluting results from the mainstays, and they want a higher stock price, so they are going to report them separately. I'm not sure why they have to form a whole new corporate structure for that though; they could just break out the numbers in their reports.
- Arnt 11y ago
  Or they're saying "so that the adults who supervise moneymaking won't bother the moonshot meetings at abc.xyz and spoil the fun with all their blather about next quarter's earnings".
  - kennethcwilbur 11y ago
    Or they're saying "We're personally tired of the boring but profitable business of selling ads. Let's replace ourselves and focus on the cool stuff."
    - pknerd 11y ago
      Or they're saying "Let's getrid of 'Don't be evil' thing and do something evil with different name"
- dspeyer 11y ago
  Or so that once there's good news from a spinoff, they'll be able to announce it. A small profit there would get lost in the bigger revenue streams under the old model. Remember how the media kept running "How long can Google afford to subsidize Youtube?" stories well after Youtube turned profitable?

DonHopkins 11y ago

So if Larry Page is King Azaz of Dictionopolis, then who is his mortal enemy, the Mathemagician of Digitopolis? https://en.wikipedia.org/wiki/The_Phantom_Tollbooth https://en.wikipedia.org/wiki/The_Phantom_Tollbooth

yRetsyM 11y ago

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 one to me, I expected that to be separate.

tenoman 11y ago
I think the idea was to keep anything related to ad revenue all together under Sundar, and Youtube is definitely a part of that.
- ariwilson 11y ago
  Or "web services" in general.
  - cptn_brittish 11y ago
    It seems to me that Google is now the software arm and everything else is spun off into its individual niches.
Spooky23 11y ago
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.
- vonmoltke 11y ago
  This reorganization makes no difference on the financials. The release explicitly stated the company is trading at the conglomerate level.
  - S4M 11y ago
    Yes, I guess the ones that are getting affected are the Google (not Alphabet) employees, since now it must be much more complicated for an engineer working on a Google project to be transferred to something more sexy such as the Self Driving Car. Disclaimer: I don't work at Google and don't know anybody who does, so I might be totally off.
    - trhway 11y ago
      i guess the employees will now also get a clear feel who of them is "maker" and who is "taker" :) By the way - who is inheriting the piles of money accumulated in the tax heavens? I think that is another elephant in the room. The GoogleX+Fiber+... is obviously a money hungry black hole, so would they be able now to redirect/invest this money from abroad straight into hat loss generating business without incurring the taxes?
      - joshstaiger 11y ago
        Only if it is invested offshore. If it comes back to the US, it will be taxed. Same situation as before.
  - moritzplassnig 11y ago
    It will have an impact - they will break out the Google Financials in Q4 & overall be more transparent about the different projects.
mathattack 11y ago
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 come in and demand a spinoff. The share structure of Google/Alphabet precludes this from happening.
- toomuchtodo 11y ago
  Transparency is easier when you have control (Class A versus Class C shares). I'm surprised more largish tech companies haven't followed along to not be at the whim of WallStreet and other short-term outlook players.
  - mathattack 11y ago
    Here's the thing... Many companies are actually poorly run. For most of them, Wall Street does the dirty work of forcing them to relinquish their money to more productive efforts. (Think of all the bloated monopolies who used to have fleets of corporate jets and crazy perks) No extreme is right or wrong.
  - carbocation 11y ago
    Aren't the Class B shares the major voting shares, with 10x as many votes per share as Class A (10 vs 1)?
    - Bedon292 11y ago
      Correct: Class C - 0 Votes (GOOG) Class A - 1 Vote (GOOGL ~4% higher cost per share) Class B - 10 Votes (Not publicly traded)
      - toomuchtodo 11y ago
        Can Class B shares be traded privately between individuals? Or do they have conditions attached (right of first refusal back to founders/company, etc)?
pkinsky 11y ago
>Calico A clean line between Calico and the advertising business can only be a good thing. Hopefully this means they can get on with analyzing every genome they can get their hands on.
JoshTriplett 11y ago
I wonder if that'll include Google Fi, and if that'll be separate or go into the same subsidiary as Fiber.

deleted 11y ago

[deleted]

downandout 11y ago

What they are really saying with all of this is..."We are moving all of our profitable businesses under one umbrella that will be reported separately, and putting all of our money-losing businesses under another, in hopes that investors will basically ignore the unprofitable stuff and only focus on our profitable businesses.". Apparently the moonshots are diluting results from the mainstays, and they want a higher stock price, so they are going to report them separately. I'm not sure why they have to form a whole new corporate structure for that though; they could just break out the numbers in their reports.

Arnt 11y ago
Or they're saying "so that the adults who supervise moneymaking won't bother the moonshot meetings at abc.xyz and spoil the fun with all their blather about next quarter's earnings".
- kennethcwilbur 11y ago
  Or they're saying "We're personally tired of the boring but profitable business of selling ads. Let's replace ourselves and focus on the cool stuff."
  - pknerd 11y ago
    Or they're saying "Let's getrid of 'Don't be evil' thing and do something evil with different name"
dspeyer 11y ago
Or so that once there's good news from a spinoff, they'll be able to announce it. A small profit there would get lost in the bigger revenue streams under the old model. Remember how the media kept running "How long can Google afford to subsidize Youtube?" stories well after Youtube turned profitable?