9 ms·

Google's Tough Alphabet Transition

77 points by tosseraccount 11y ago

sna1l 11y ago
This doesn't seem very unexpected. Companies who haven't been expected to make revenue/profit are being forced to rethink their business strategies with that in mind. It is a tough process and a lot of people don't like it. I think in the long term it will become beneficial for alphabet as they will funnel money into the successful businesses. Having said that, this might make the funding of true moon shots less likely. The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it. Obviously it won't just be a direct measure of revenue, but it should be interesting to see how this affects how much time Google gives the rest of the Alphabet companies
- lettergram 11y ago
  I'm picturing it killing a lot of innovation at Google. Many projects, such as the self-driving car or search for that matter have no initial profitable means for years if ever. With that, I feel it will also stop the evolution of many products, e.g. Why risk investing in a long term project, when they know we can make money this quarter doing X. On the other hand this will likely lead to more stable products,and products will disappear less often.
  - wrsh07 11y ago
    Just FYI, search is ridiculously profitable [see "search ads"]
    - lettergram 11y ago
      I agree search is ridiculously profitable, but if you showed up to a meeting in 1998 and said: "Search is going to be a multi-billion dollar industry" the business exec would laugh you out of the office.
      - nine_k 11y ago
        In 1998 there was a enough online commerce (in fact, there was a crazy boom of it, the original internet boom) for a good exec to see the potential of the ad market for it. Searching is precisely the moment when an ad can be well-targeted.
        erikpukinskis 11y ago
        I was alive back then. It was not common belief that search would be a huge money maker. No one thought Google would be bigger than Microsoft until they started doing the ad auctions and people could start to see how the money could actually flow. That Google won the Internet money pot was a bit of a surprise to most.
        mc32 11y ago
        I think that started with overture. At least I recall overture's business prop being paid search results.
        nine_k 11y ago
        I was also a user of google.stanford.edu back then. Nobody then thought that Apple would be bigger than MS either.
      - jacques_chester 11y ago
        That's because they'd be right to laugh. Search isn't a multi-billion dollar industry. Advertising is. If you don't believe me, name a company making billions of dollars from search engine fees alone.
        jacquesm 11y ago
        Would palantir qualify?
        jacques_chester 11y ago
    - fludlight 11y ago
      "search ads" == "lead generation" This is the difference between FB and GOOG: one sells an audience that, demographically, is likely to want your product (similar to how TV ads are sold), the other, one that wants to buy it, likely right f*ing now.
      - dhimes 11y ago
        I'm not sure which is which in your example- I'm guessing that you mean the person searching GOOG is more likely to buy, but nevertheless I think the only one that applies to entirely is Amazon. The percent of searches in which I am trying to buy something is quite small on Google. Even if I am in the market, I am doing background research on the web. When I'm ready to buy I most often go to Amazon (even if I don't buy from them I still check). On Amazon, when I search I have my wallet out.
  - mtgx 11y ago
    I think it will slow down innovation and Google, and I also think it will make the surviving products better in the long term, with lower chances of being killed. Right now it seems Google employees want to jump to exciting new products all the time, and nobody is left to maintain the older ones. This would happen a lot less often if those "exciting new products" had a high chance of getting bankrupt and then for them to lose those jobs.
  - ignoramous 11y ago
    > I'm picturing it killing a lot of innovation at Google. I don't think so. Amazon has been run a lot like that. It hasn't been doing badly on the innovation front.
  - JVIDEL 11y ago
    In all honesty ARA was far closer to consumer-ready and thus profitability, but the whole modular phone project seems dead now
    - marssaxman 11y ago
      How do you figure? Having done some product development work, it seemed to me like a highly speculative project, unlikely ever to ship as a consumer device.
  - visarga 11y ago
    I am saddened by Google's decision to cut off Boston Dynamics because it sends a negative message about the progress of robotics in the near term. I was hoping they would apply reinforcement learning algorithms from DeepMind to solve robot locomotion and various other robotic tasks. On the other hand I am happy to see Amazon's Echo being successful and take that as a sign that at least voice/dialogue systems are going to improve by a lot in the near future, or at least that there are tons of funds to be invested in research.
- a_imho 11y ago
  >The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it. Won't/can't read the article because Wired adwall, but what is this business model? Whenever self driving cars came up, I see they need a miracle. Solution looking for a problem. Points being: have better or on par alternatives for transportation already, don't have the necessary legal framework to operate in, people actually like to drive, road safety could be improved way better with other improvements (better education, harsher fines, lowering and enforcing speed limits), environmental impact decreased by moving away from motorized transportation etc.
  - fweespee_ch 11y ago
    > Won't/can't read the article because Wired adwall, but what is this business model? 1) Replacing taxi drivers. 2) Replacing commuters who don't want to drive. Both of those problems exist on the scale of hundreds of thousands / millions of people. Solving them with good margins is a business model.
    - mbil 11y ago
      Not to mention shipping/delivery drivers.
      - fweespee_ch 11y ago
        I think the delivery drivers will still be needed as they need to physically exit the vehicle and handle the packages. To me, at least, that seems like a use case where you'd need drones.
    - lallysingh 11y ago
      3) Drive between owners to reduce the number of cars a family has to have.
      - daveguy 11y ago
        This would be huge. Half or less of the cars equal mobility. If a single family car could drive home so my daughter could drive to school and then drive back to work so I could drive home it would be awesome. You still get near full autonomy for a family with a single car. No-human driving is probably a tougher policy hurdle than human-ready-to-take-the-wheel driving, but it would be amazing.
- melling 11y ago
  "The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it" It's not clear and it's not guaranteed. There's now a lot of competition in that space, and it might take another decade or before there's even revenue.
- draw_down 11y ago
  Still, it matters how that process happens and who drives it. There have been stories for weeks about what a shitty boss Tony Fadell is. There's nothing about businesses making money that necessitates that sort of thing.
ihsw 11y ago
Where does Google's Cloud Computing tie into? There was some noise about it rivaling the search business in terms of growth and capacity to be self-sustaining. Surely it's prudent to at least mention it in the same breath as search.
- simula67 11y ago
  I assume they are part of Google itself. From the earning's report [1] it seems like total revenue was $21 billion for quarter ending in December. Around $19 billion "Google advertising revenues" and $2 billion "Google other revenues". There seems to be no more break up of beyond that point. [1] https://abc.xyz/investor/news/earnings/2015/Q4_google_earnings/index.html https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
- deelowe 11y ago
  Cloud isn't an alphabet company. They are financed as part of Google.
- outside1234 11y ago
  Putting GCP into an Alphabet company would expose that they essentially have no revenue, so they haven't done it.
webwielder2 11y ago
I know I shouldn't immediately dismiss the entirety of an article just because it uses Rob Enderle for a quote, but I choose to do so anyway.
deleted 11y ago
[deleted]

77 points by tosseraccount 11y ago

sna1l 11y ago

This doesn't seem very unexpected. Companies who haven't been expected to make revenue/profit are being forced to rethink their business strategies with that in mind. It is a tough process and a lot of people don't like it. I think in the long term it will become beneficial for alphabet as they will funnel money into the successful businesses. Having said that, this might make the funding of true moon shots less likely. The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it. Obviously it won't just be a direct measure of revenue, but it should be interesting to see how this affects how much time Google gives the rest of the Alphabet companies

lettergram 11y ago
I'm picturing it killing a lot of innovation at Google. Many projects, such as the self-driving car or search for that matter have no initial profitable means for years if ever. With that, I feel it will also stop the evolution of many products, e.g. Why risk investing in a long term project, when they know we can make money this quarter doing X. On the other hand this will likely lead to more stable products,and products will disappear less often.
- wrsh07 11y ago
  Just FYI, search is ridiculously profitable [see "search ads"]
  - lettergram 11y ago
    I agree search is ridiculously profitable, but if you showed up to a meeting in 1998 and said: "Search is going to be a multi-billion dollar industry" the business exec would laugh you out of the office.
    - nine_k 11y ago
      In 1998 there was a enough online commerce (in fact, there was a crazy boom of it, the original internet boom) for a good exec to see the potential of the ad market for it. Searching is precisely the moment when an ad can be well-targeted.
      - erikpukinskis 11y ago
        I was alive back then. It was not common belief that search would be a huge money maker. No one thought Google would be bigger than Microsoft until they started doing the ad auctions and people could start to see how the money could actually flow. That Google won the Internet money pot was a bit of a surprise to most.
        mc32 11y ago
        I think that started with overture. At least I recall overture's business prop being paid search results.
        nine_k 11y ago
        I was also a user of google.stanford.edu back then. Nobody then thought that Apple would be bigger than MS either.
    - jacques_chester 11y ago
      That's because they'd be right to laugh. Search isn't a multi-billion dollar industry. Advertising is. If you don't believe me, name a company making billions of dollars from search engine fees alone.
      - jacquesm 11y ago
        Would palantir qualify?
        jacques_chester 11y ago
  - fludlight 11y ago
    "search ads" == "lead generation" This is the difference between FB and GOOG: one sells an audience that, demographically, is likely to want your product (similar to how TV ads are sold), the other, one that wants to buy it, likely right f*ing now.
    - dhimes 11y ago
      I'm not sure which is which in your example- I'm guessing that you mean the person searching GOOG is more likely to buy, but nevertheless I think the only one that applies to entirely is Amazon. The percent of searches in which I am trying to buy something is quite small on Google. Even if I am in the market, I am doing background research on the web. When I'm ready to buy I most often go to Amazon (even if I don't buy from them I still check). On Amazon, when I search I have my wallet out.
- mtgx 11y ago
  I think it will slow down innovation and Google, and I also think it will make the surviving products better in the long term, with lower chances of being killed. Right now it seems Google employees want to jump to exciting new products all the time, and nobody is left to maintain the older ones. This would happen a lot less often if those "exciting new products" had a high chance of getting bankrupt and then for them to lose those jobs.
- ignoramous 11y ago
  > I'm picturing it killing a lot of innovation at Google. I don't think so. Amazon has been run a lot like that. It hasn't been doing badly on the innovation front.
- JVIDEL 11y ago
  In all honesty ARA was far closer to consumer-ready and thus profitability, but the whole modular phone project seems dead now
  - marssaxman 11y ago
    How do you figure? Having done some product development work, it seemed to me like a highly speculative project, unlikely ever to ship as a consumer device.
- visarga 11y ago
  I am saddened by Google's decision to cut off Boston Dynamics because it sends a negative message about the progress of robotics in the near term. I was hoping they would apply reinforcement learning algorithms from DeepMind to solve robot locomotion and various other robotic tasks. On the other hand I am happy to see Amazon's Echo being successful and take that as a sign that at least voice/dialogue systems are going to improve by a lot in the near future, or at least that there are tons of funds to be invested in research.
a_imho 11y ago
>The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it. Won't/can't read the article because Wired adwall, but what is this business model? Whenever self driving cars came up, I see they need a miracle. Solution looking for a problem. Points being: have better or on par alternatives for transportation already, don't have the necessary legal framework to operate in, people actually like to drive, road safety could be improved way better with other improvements (better education, harsher fines, lowering and enforcing speed limits), environmental impact decreased by moving away from motorized transportation etc.
- fweespee_ch 11y ago
  > Won't/can't read the article because Wired adwall, but what is this business model? 1) Replacing taxi drivers. 2) Replacing commuters who don't want to drive. Both of those problems exist on the scale of hundreds of thousands / millions of people. Solving them with good margins is a business model.
  - mbil 11y ago
    Not to mention shipping/delivery drivers.
    - fweespee_ch 11y ago
      I think the delivery drivers will still be needed as they need to physically exit the vehicle and handle the packages. To me, at least, that seems like a use case where you'd need drones.
  - lallysingh 11y ago
    3) Drive between owners to reduce the number of cars a family has to have.
    - daveguy 11y ago
      This would be huge. Half or less of the cars equal mobility. If a single family car could drive home so my daughter could drive to school and then drive back to work so I could drive home it would be awesome. You still get near full autonomy for a family with a single car. No-human driving is probably a tougher policy hurdle than human-ready-to-take-the-wheel driving, but it would be amazing.
melling 11y ago
"The self driving car business isn't close to profitability, but clearly has a successful business model ahead of it" It's not clear and it's not guaranteed. There's now a lot of competition in that space, and it might take another decade or before there's even revenue.
draw_down 11y ago
Still, it matters how that process happens and who drives it. There have been stories for weeks about what a shitty boss Tony Fadell is. There's nothing about businesses making money that necessitates that sort of thing.

ihsw 11y ago

Where does Google's Cloud Computing tie into? There was some noise about it rivaling the search business in terms of growth and capacity to be self-sustaining. Surely it's prudent to at least mention it in the same breath as search.

simula67 11y ago
I assume they are part of Google itself. From the earning's report [1] it seems like total revenue was $21 billion for quarter ending in December. Around $19 billion "Google advertising revenues" and $2 billion "Google other revenues". There seems to be no more break up of beyond that point. [1] https://abc.xyz/investor/news/earnings/2015/Q4_google_earnings/index.html https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
deelowe 11y ago
Cloud isn't an alphabet company. They are financed as part of Google.
outside1234 11y ago
Putting GCP into an Alphabet company would expose that they essentially have no revenue, so they haven't done it.

webwielder2 11y ago

I know I shouldn't immediately dismiss the entirety of an article just because it uses Rob Enderle for a quote, but I choose to do so anyway.

deleted 11y ago

[deleted]