15 ms·

Google paid $380M to buy Bebop, Diane Greene donating her $148M share

84 points by chermanowicz 11y ago

samstave 11y ago
What exactly is/did Bebop make/do?
- samfisher83 11y ago
  Its kind of hard from their website to figure out what they do.
- imrehg 11y ago
  Indeed it's very unclear, though some little bits from a previous announcement[1]: "bebop is a new development platform that makes it easy to build and maintain enterprise applications." I guess it was vague on purpose[2]: "[bebop] had not publicly said anything about its technology, operating in so-called stealth mode." [1]: http://googlecloudplatform.blogspot.tw/2015/11/investing-in-our-business-for-the-future.html http://googlecloudplatform.blogspot.tw/2015/11/investing-in-... [2]: http://www.nytimes.com/2015/11/20/technology/google-picks-diane-greene-to-expand-its-cloud-business.html?_r=0 http://www.nytimes.com/2015/11/20/technology/google-picks-di...
  - Someone1234 11y ago
    So a company with zero customers, brand, or other non-reproducible assets is worth almost $400m..? I'd be asking questions about this if I was a Google shareholder...
    - deleted 11y ago
      [deleted]
      - jamespo 11y ago
        Please tell us more. It still seems like a lot of money, although of course, not to Google.
        deleted 11y ago
        [deleted]
      - coryrc 11y ago
        Why not just regular-hire the people since the company is failing?
        s73v3r 11y ago
        They might not want to go to Google. Doing this, an acquihire, they can at least get a couple years out of the team, holding the vesting of the shares over their heads, before the team breaks up.
        IkmoIkmo 11y ago
        > They might not want to go to Google. Doing this, an acquihire, they can at least get a couple years out of the team, holding the vesting of the shares over their heads, before the team breaks up. That sounds terribly. You're hiring a team that wasn't able to deliver, for a ridiculous premium (essentially a ~$10m signup bonus per employee), knowing that long-term there's no structural future as they're leaving at the earliest opportunity, i.e. when you stop bribing them to stay on with a share incentive. Perhaps they built some really promising IP that could work well with Google, in addition to an undoubtedly useful acqui-hire, that'd explain things. I don't think your reading is very plausible but who knows.
        s73v3r 11y ago
        I know nothing about the company, their IP, their talent, etc. So we don't know if they weren't able to deliver or not. And this kind of short term thinking isn't uncommon for large companies. And by the time the vesting period is over, there will likely be newer, better technologies out there. And not everyone will leave after vesting, but you'll have to have done something to cause them to stay on before vesting is over.
        XJOKOLAT 11y ago
        Love the clarity of this question.
    - yc8329 11y ago
      What was acquihired was the cream of the cream from a company that created a whopping $50B+ market at its peak. At its core you have ~30 distributed computing legends and a pretty neat leaders at the top.
- tyingq 11y ago
  I found a few bits and pieces searching around. The most specific thing was a few bullet points from the resume of a person that did an internship at Bebop: • Implemented modular front-end components & architecture to enable rapid app development on the bebop platform • Designed an intelligent peoples directory by surfacing relationships within an enterprise by analyzing the bebop entity dataset So, some sort of cloud RAD tool.
- throwaway090999 11y ago
  I'm posting from a throwaway because I have fairly intimate knowledge of Bebop. The reality is that they built and rebuilt several "enterprise" applications and pieces of technology. At one point it was a API based database, and then an application, and the latest iteration was an ATS built on top of their proprietary database. No one at their company could tell me what they actually did because there wasn't an aligned vision from their management. Alas, they had senior people formerly from VMWare and Diane Green at the helm. The company existed for roughly 2 years and wasn't able to actually produce customer working software from what I could tell. The acquisition was a straight up acquihire to get senior enterprise software folks on board to help build Google's presence there.
  - tyingq 11y ago
    What is "an ATS"? Applicant tracking system? Above top secret? Can you share roughly how many employees would have come in the aquihire? $380M is a big number.
    - samstave 11y ago
      Interesting that Diane is donating her $148MM - why pay that much to acquire her if it's going to be just donated? Not that there is anything wrong with that, it's just curious.
      - deleted 11y ago
        [deleted]
        dreaminvm 11y ago
        Source? VMware was sold for $625M to EMC, so unless Diane and partner had a hidden company worth 20-30 billion, the math doesn't add up.
        djloche 11y ago
        Fortune.com 2007 article: >"Greene has run VMware since founding it in 1998 with her husband, Mendel Rosenblum. She sold the company to EMC in 2004 for $625 million, then stayed on to continue running it. Still majority-owned by EMC but spun off in an August IPO, VMware is the fastest-growing and most influential enterprise software company Silicon Valley has seen in a decade - and worth a cool $26 billion."
- kdamken 11y ago
  Good question - I was wondering the same. A quick Google took me to their site, which did a wonderful job of telling me pretty much nothing: "We build products based on how people work. We are focused on redesigning workplace tools so that everyone can be productive and communicate with ease." So... they make/do what now? How does a company like that get bought out for so much?
thrownaway2424 11y ago
Is it just me, or is this deal somewhat shady? It just seems like acquiring the startup of one of your board members is one of those things you shouldn't do, for the sake of appearances if nothing else. When Ralph Yarro was using pumped-up SCOX shares to acquire his side businesses, people were rightly suspicious, and lawsuits followed. Of course SCOX != GOOG in any way, but the activity seems analogous.
- ape4 11y ago
  Except for the charity donation
  - kareemm 11y ago
    Two things wrt the donation. First, she gets a massive tax receipt to use against other income. I don't know how it works in the US, but in Canada you can use charitable tax receipts to lower taxable income in future years if you don't want to use the whole thing in the year in which you made the donation. Second, she donated to a donor advised fund, or DAF. A DAF is a charitable entity that is sort of like a bank account: you put your money in, get the tax receipt, your money manager invests the capital, and you can allocate some portion of the money (the amount depends on the financial institution's policies) to actual 501c3's (I.e charities doing charitable work). DAFs are just another instrument offered by the Fildelities of the world to increase assets under management. The most common reason people give to DAFs is so they can get a tax receipt for the current year and defer the decision about which charities to support until later. Plus giving stock to charity is the most tax-efficient way to give. She gets the tax receipt for $148m regardless if the stock goes down after the donation. And if it goes up, she has more to give to charities. I've Had a long term contract to build an online donor advised fund, so my head has been in this space for 8y or so.
    - jahnu 11y ago
      > I don't know how it works in the US, but in Canada you can use charitable tax receipts to lower taxable income in future years if you don't want to use the whole thing in the year in which you made the donation. I don't know how this can be a tax-dodge of any significance. Surely you can only offset your tax by the amount you donated anyway so it makes no difference to you in the end.
SeoxyS 11y ago
Is the "donor-advised fund" mentioned here similar to a "charitable remainder trust?" If so, this may just be a very astute tax planning strategy.
- aaronkrolik 11y ago
  My thought exactly. A $148M tax write off is pretty substantial
- rhc2104 11y ago
  Not really, because you get none of the money back. However, you can take the charitable tax deduction this year, instead of future years when you plan on giving money to charity. Also, the capital gains/dividends/interest that the DAF earns isn't taxed, so if you plan on giving to charities in the future, this is one way of increasing that amount.
nodesocket 11y ago
(downvoted to -1 points yet again, even though it had 4 points) 46 days ago, on the original thread[1] announcing the acquisition, I wrote the following comment, which proceeded to get downvoted to the bottom. "Did Diane's bebop even launch? I can't find their website. It is kind of frustrating that everybody involved (employees, investors) in bebop are getting a payday, without really putting in much work, or verifying their ideas. Just leaves a sour taste in my mouth (old boys network) as a two-time failed entrepreneur." 1. https://news.ycombinator.com/item?id=10597896 https://news.ycombinator.com/item?id=10597896
s73v3r 11y ago
And what did the people who've actually done the work get?
- kzhahou 11y ago
  Only founders get rich, don't you know?
- ProAm 11y ago
  They get to work at Google now. /s
bankim 11y ago
From what I've known, top engineers from VMware had moved to Bebop and recruiting was purely based on their previous performance and contacts with founding team at VMware.
intopieces 11y ago
Much of this discussion revolves around the perfectly legal tax avoidance mechanism utilized by Greene. Missing, though, is what exactly that revelation means. Are we advocating the removal of such mechanisms? Calling for an addition tax? Is there a bill I can advocate my senator to vote for? I do find such schemes interesting in their own right, but I can't quite shake the tone of indignation present in the discussion -- indignation that seems to lead nowhere.
- humanrebar 11y ago
  I mostly agree, but there is a justice issue when the tax code has loopholes that are only accessible to people with clever tax attorneys. To contrast, if I got an extra $5K in my bonus, I couldn't give it to my friend to help pay for the adoption expenses she has be racking up. If it were a donation of $50 million, I could form a targeted charity and write the whole thing off on my taxes. What to do about it? Probably simplify the tax code. Complicated laws, especially tax laws, are just not fair.

84 points by chermanowicz 11y ago

samstave 11y ago

What exactly is/did Bebop make/do?

samfisher83 11y ago
Its kind of hard from their website to figure out what they do.
imrehg 11y ago
Indeed it's very unclear, though some little bits from a previous announcement[1]: "bebop is a new development platform that makes it easy to build and maintain enterprise applications." I guess it was vague on purpose[2]: "[bebop] had not publicly said anything about its technology, operating in so-called stealth mode." [1]: http://googlecloudplatform.blogspot.tw/2015/11/investing-in-our-business-for-the-future.html http://googlecloudplatform.blogspot.tw/2015/11/investing-in-... [2]: http://www.nytimes.com/2015/11/20/technology/google-picks-diane-greene-to-expand-its-cloud-business.html?_r=0 http://www.nytimes.com/2015/11/20/technology/google-picks-di...
- Someone1234 11y ago
  So a company with zero customers, brand, or other non-reproducible assets is worth almost $400m..? I'd be asking questions about this if I was a Google shareholder...
  - deleted 11y ago
    [deleted]
    - jamespo 11y ago
      Please tell us more. It still seems like a lot of money, although of course, not to Google.
      - deleted 11y ago
        [deleted]
    - coryrc 11y ago
      Why not just regular-hire the people since the company is failing?
      - s73v3r 11y ago
        They might not want to go to Google. Doing this, an acquihire, they can at least get a couple years out of the team, holding the vesting of the shares over their heads, before the team breaks up.
        IkmoIkmo 11y ago
        > They might not want to go to Google. Doing this, an acquihire, they can at least get a couple years out of the team, holding the vesting of the shares over their heads, before the team breaks up. That sounds terribly. You're hiring a team that wasn't able to deliver, for a ridiculous premium (essentially a ~$10m signup bonus per employee), knowing that long-term there's no structural future as they're leaving at the earliest opportunity, i.e. when you stop bribing them to stay on with a share incentive. Perhaps they built some really promising IP that could work well with Google, in addition to an undoubtedly useful acqui-hire, that'd explain things. I don't think your reading is very plausible but who knows.
        s73v3r 11y ago
        I know nothing about the company, their IP, their talent, etc. So we don't know if they weren't able to deliver or not. And this kind of short term thinking isn't uncommon for large companies. And by the time the vesting period is over, there will likely be newer, better technologies out there. And not everyone will leave after vesting, but you'll have to have done something to cause them to stay on before vesting is over.
      - XJOKOLAT 11y ago
        Love the clarity of this question.
  - yc8329 11y ago
    What was acquihired was the cream of the cream from a company that created a whopping $50B+ market at its peak. At its core you have ~30 distributed computing legends and a pretty neat leaders at the top.
tyingq 11y ago
I found a few bits and pieces searching around. The most specific thing was a few bullet points from the resume of a person that did an internship at Bebop: • Implemented modular front-end components & architecture to enable rapid app development on the bebop platform • Designed an intelligent peoples directory by surfacing relationships within an enterprise by analyzing the bebop entity dataset So, some sort of cloud RAD tool.
throwaway090999 11y ago
I'm posting from a throwaway because I have fairly intimate knowledge of Bebop. The reality is that they built and rebuilt several "enterprise" applications and pieces of technology. At one point it was a API based database, and then an application, and the latest iteration was an ATS built on top of their proprietary database. No one at their company could tell me what they actually did because there wasn't an aligned vision from their management. Alas, they had senior people formerly from VMWare and Diane Green at the helm. The company existed for roughly 2 years and wasn't able to actually produce customer working software from what I could tell. The acquisition was a straight up acquihire to get senior enterprise software folks on board to help build Google's presence there.
- tyingq 11y ago
  What is "an ATS"? Applicant tracking system? Above top secret? Can you share roughly how many employees would have come in the aquihire? $380M is a big number.
  - samstave 11y ago
    Interesting that Diane is donating her $148MM - why pay that much to acquire her if it's going to be just donated? Not that there is anything wrong with that, it's just curious.
    - deleted 11y ago
      [deleted]
      - dreaminvm 11y ago
        Source? VMware was sold for $625M to EMC, so unless Diane and partner had a hidden company worth 20-30 billion, the math doesn't add up.
        djloche 11y ago
        Fortune.com 2007 article: >"Greene has run VMware since founding it in 1998 with her husband, Mendel Rosenblum. She sold the company to EMC in 2004 for $625 million, then stayed on to continue running it. Still majority-owned by EMC but spun off in an August IPO, VMware is the fastest-growing and most influential enterprise software company Silicon Valley has seen in a decade - and worth a cool $26 billion."
kdamken 11y ago
Good question - I was wondering the same. A quick Google took me to their site, which did a wonderful job of telling me pretty much nothing: "We build products based on how people work. We are focused on redesigning workplace tools so that everyone can be productive and communicate with ease." So... they make/do what now? How does a company like that get bought out for so much?

thrownaway2424 11y ago

Is it just me, or is this deal somewhat shady? It just seems like acquiring the startup of one of your board members is one of those things you shouldn't do, for the sake of appearances if nothing else. When Ralph Yarro was using pumped-up SCOX shares to acquire his side businesses, people were rightly suspicious, and lawsuits followed. Of course SCOX != GOOG in any way, but the activity seems analogous.

ape4 11y ago
Except for the charity donation
- kareemm 11y ago
  Two things wrt the donation. First, she gets a massive tax receipt to use against other income. I don't know how it works in the US, but in Canada you can use charitable tax receipts to lower taxable income in future years if you don't want to use the whole thing in the year in which you made the donation. Second, she donated to a donor advised fund, or DAF. A DAF is a charitable entity that is sort of like a bank account: you put your money in, get the tax receipt, your money manager invests the capital, and you can allocate some portion of the money (the amount depends on the financial institution's policies) to actual 501c3's (I.e charities doing charitable work). DAFs are just another instrument offered by the Fildelities of the world to increase assets under management. The most common reason people give to DAFs is so they can get a tax receipt for the current year and defer the decision about which charities to support until later. Plus giving stock to charity is the most tax-efficient way to give. She gets the tax receipt for $148m regardless if the stock goes down after the donation. And if it goes up, she has more to give to charities. I've Had a long term contract to build an online donor advised fund, so my head has been in this space for 8y or so.
  - jahnu 11y ago
    > I don't know how it works in the US, but in Canada you can use charitable tax receipts to lower taxable income in future years if you don't want to use the whole thing in the year in which you made the donation. I don't know how this can be a tax-dodge of any significance. Surely you can only offset your tax by the amount you donated anyway so it makes no difference to you in the end.

SeoxyS 11y ago

Is the "donor-advised fund" mentioned here similar to a "charitable remainder trust?" If so, this may just be a very astute tax planning strategy.

aaronkrolik 11y ago
My thought exactly. A $148M tax write off is pretty substantial
rhc2104 11y ago
Not really, because you get none of the money back. However, you can take the charitable tax deduction this year, instead of future years when you plan on giving money to charity. Also, the capital gains/dividends/interest that the DAF earns isn't taxed, so if you plan on giving to charities in the future, this is one way of increasing that amount.

nodesocket 11y ago

(downvoted to -1 points yet again, even though it had 4 points) 46 days ago, on the original thread[1] announcing the acquisition, I wrote the following comment, which proceeded to get downvoted to the bottom. "Did Diane's bebop even launch? I can't find their website. It is kind of frustrating that everybody involved (employees, investors) in bebop are getting a payday, without really putting in much work, or verifying their ideas. Just leaves a sour taste in my mouth (old boys network) as a two-time failed entrepreneur." 1. https://news.ycombinator.com/item?id=10597896 https://news.ycombinator.com/item?id=10597896

s73v3r 11y ago

And what did the people who've actually done the work get?

kzhahou 11y ago
Only founders get rich, don't you know?
ProAm 11y ago
They get to work at Google now. /s

bankim 11y ago

From what I've known, top engineers from VMware had moved to Bebop and recruiting was purely based on their previous performance and contacts with founding team at VMware.

intopieces 11y ago

Much of this discussion revolves around the perfectly legal tax avoidance mechanism utilized by Greene. Missing, though, is what exactly that revelation means. Are we advocating the removal of such mechanisms? Calling for an addition tax? Is there a bill I can advocate my senator to vote for? I do find such schemes interesting in their own right, but I can't quite shake the tone of indignation present in the discussion -- indignation that seems to lead nowhere.

humanrebar 11y ago
I mostly agree, but there is a justice issue when the tax code has loopholes that are only accessible to people with clever tax attorneys. To contrast, if I got an extra $5K in my bonus, I couldn't give it to my friend to help pay for the adoption expenses she has be racking up. If it were a donation of $50 million, I could form a targeted charity and write the whole thing off on my taxes. What to do about it? Probably simplify the tax code. Complicated laws, especially tax laws, are just not fair.