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i am not sure i understand how this is supposed to work, if we are being really logical in the financial discipline shouldnt like 75% of alphabet subsidiaries s

• iaw 11y ago
  If you're familiar with the Time Value of Money [1] you can compare the discounted future revenue streams from the non-profitable subsidiaries to their current cost of operations (vs. a sale price). Boston Dynamics is, conservatively, more than 5 years off from having a product that anyone will purchase (the marines don't want their bulldogs). Other non-profitable ventures may have more near-term revenue streams that outweigh their present cost of operation. Hope that makes sense. [1] https://en.wikipedia.org/wiki/Time_value_of_money https://en.wikipedia.org/wiki/Time_value_of_money
  • TheOtherHobbes 11y ago
    >you can compare the discounted future revenue streams from the non-profitable subsidiaries to their current cost of operations (vs. a sale price). Not really. CFOs like to think they can. But the idea that anyone can estimate the revenue stream of a company five years - five years - away from profitability is just entrail reading. No one can see that far ahead. And in Google's case, with the ad industry in serious danger, it needs to give itself as many options for medium term survival as possible. Relying on Google X or a cloud service to deliver isn't enough, IMO.
    • discodave 11y ago
      Cloud service (assuming you mean AWS/IaaS/PaaS competitor) is realistic since AWS is doing $10B run rate right now taking money out of legacy vendors like nobody's business.