4 ms·
Sure, but that's exactly the case with commercial fire insurance versus actual protection rackets too.
by caf 10y ago
Sure, but that's exactly the case with commercial fire insurance versus actual protection rackets too.
- jacquesm 10y agoCommercial fire insurance does not typically take equity in the places they insure.
- caf 10y agoDoes payment in the form of equity rather than cash affect the incentives in a negative way? It's not enough to call out a distinction: how does it make a difference? If anything, the equity should mean that Google's incentives are more closely aligned with the startup's than the fire insurer's are with the insured.
- jacquesm 10y agoYes, because obviously if that equity turns out to be worth a very large amount of money and the company is never sued Google is not going to turn around and say 'oh, sorry for this vastly disproportionate payment, here is your repayment'. In fact, the best outcome for Google would be if nobody ever got sued. (That's also the best outcome for the companies but there is no way of knowing if they would have gotten sued had they not paid their protection fee.)
- caf 10y agoHow is that different to "You paid an awful lot of fire insurance premiums over the years but never had a fire"? The insurance company certainly isn't giving you a refund either. It seems to me that if the equity turns out to be worth a lot, then the value of the protection is greater as well - the potential losses are likely to pretty closely track the company's value.
- reitanqild 10y agoSupporting you here: I see this as somebody inside google trying to do a oldschool google win-win (provide better results - make healthy profits). As long as the equity stake is reasonable this sounds like a great deal. To me this isn't the mafia but the security company teaming up with you. Seems like a giant win for everyone but the trolls,
- ohyeshedid 10y ago>How is that different to "You paid an awful lot of fire >insurance premiums over the years but never had a fire"? The difference is that you aren't paying your fire insurance premiums with partial ownership of your house.
- johncolanduoni 10y agoThe best outcome for any insurance company is if their contractural obligations never make them do anything. What's your point?
- neltnerb 10y agoWhen I read this, my first thought was that the ownership stake is helpful in some way for the legal defense. I'll be curious what numbers they're talking about once they are available.
- brudgers 10y agoFire insurance companies are not in a position to legally set fire to the buildings of those who refuse their services either. Here Google's scheme is monitizing its patent portfolio. Currently, the calculation is that this racket provides a better ROI than hiring lawyers and suing. There's still money on the monitize patents table.
- pmontra 10y agoGoogle could lobby to end software patents. Insurance companies can do little to end fire.
- fuzzfactor 10y agoInsurance companies do make an effort to prevent and mitigate fires, including lobbying.