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Alphabet Finishes Reorganization with New XXVI Company
- tareqak 9y agoTechmeme Summary: Alphabet creates XXVI Holdings Inc. through which it will separate “Other Bets” from Google and become direct owner of subsidiaries like Waymo and Verily
- ocdtrekkie 9y ago> "Google is also changing from a corporation to a limited liability company, or LLC." > "The change helps keep potential challenges in one business from spreading to another, according to Dana Hobart, a litigator with the Buchalter law firm in Los Angeles." Effectively, I take it this means Google isn't responsible if a self-driving car goes on a Skynet-esque murder spree, nor can their self-driving car property be sold off by the government to pay all of Google's antitrust fines coming down the pipe?
- gertef 9y agoYes, similar to how SpaceX isn't liable for Tesla.
- vxNsr 9y agoBut Space X and Tesla are two different companies with different shareholders and boards, the only thing they share really is the CEO.
- mark_element 9y agoIt is more like how Berkshire Hathaway owns Duracell and GEICO and actions in one don't directly impact another.
- gt2 9y agoI thought corporations have the same liability protections as LLCs and that the difference was more in the way of taxation, ownership, and administration requirements.
- Itaxpica 9y agoNope. The "liability" in the name refers to personal liability, and it's 'limited' in relation to the greater personal liability present in a partnership or sole proprietorship. An LLC's liability structure is exactly the same as that of a corporation; the main differences between the two are how taxation is handled
- ocdtrekkie 9y agoI am confused because that's what the article seems to say. The other segment on this is: > “By separating them, it allows the parent company to limit the exposure of the various obligations of the LLCs,” Hobart said. “For example, if one of the LLCs has its own debt, only that LLC will end up being responsible for payment of that debt.” Is it that the act of making them separate companies under a holding company that grants them this, rather than the change to an LLC specifically?
- xfs 9y agoSo no more Google Inc.?
- bkanber 9y agoCorrect, it'll Google LLC now.
- Flammy 9y agoDoes this feel like a "friday news dump" to anyone else?
- maxerickson 9y agoNo, it seems pretty mundane to me.
- akvadrako 9y agoA major restructuring of one of the largest companies ever is not mundane.
- fred256 9y agoWhy did they change things again or is this simply a 2-year process that is only now completing?
- mtrpcic 9y agoThe article explains it, but it's not 100% clear why the extra step was needed.. "Google co-founder Larry Page announced Alphabet two years ago to foster new businesses that operate independently from Google. Technically, however, those units, called the “Other Bets,” were still subsidiaries of Google." With this new change, XXVI Holdings will hold the equity for all child companies, rather than Google still being the owner.
- zrail 9y agoUntil now the only Alphabet subsidiary was Google Inc. The other bets were still Google Inc subsidiaries. This move brings them up a level and separates them from Google.
- BurningFrog 9y agoLooks like a pretty clean refactoring to me!
- akvadrako 9y agoI don't see why they don't just put all their subsidiaries under Alphabet. What is the purpose of Alphabet if not a holding company?
- zrail 9y agoUncertain. XXVI could be just a vehicle for accomplishing that eventually. For now it probably just simplifies the transaction.
- digitalzombie 9y agoIt's in the article. Alphabet owns google and the other bets. If one of the LLC under Alphabet get sued it doesn't effect the other LLC (bets or Google).
- neom 9y agoNice revenue reporting re-structuring! Very curious to see where this goes, that was a lot of work to blurry line items.
- goptimize 9y agoThe following sentence sounds like they plan to achieve a less transparent situation "The switch is partly related to Google’s transformation from a listed public company into a business owned by a holding company" therefore they buy back their stocks.
- zrail 9y agoIt's not any less transparent. Afaict, Alphabet Inc is the listed holding company of Google LLC and XXVI Holdings. XXVI holds the Other Bets subsidiaries that used to be Google Inc subsidiaries. Google the entity no longer has any non-Google subsidiaries so they're simplifying and streamlining Google operations by changing it into an LLC.
- goptimize 9y agoLLC cannot issue stock, right? If you buy back all stocks then you don't need to provide detailed public reports except to major stockholders?
- zrail 9y agoAlphabet is the only owner of Google Inc stock. They're retiring it all and converting the Google subsidiary to an LLC. That in no way removes their reporting requirements, because Alphabet is a publicly traded company.
- kgwgk 9y agoThe reporting requirements will be reduced, though. Alphabet reports consolidated results and you don’t get the same level of detail for each subsidiary as you would for an independet company.
- wyattk 9y agoThis seems like it is Google preparing itself for a future where it will almost certainly be hit with the antitrust hammer here in the US. Google has been getting increasing pressure from the EU [1]. It, at least in the public's eye, has been showing more monopolistic behavior and getting more attention, like discussed here [2]. There has been talk of Amazon and Facebook facing similar antitrust issues in the future too, but those seem to be quieter. The future is uncertain, but this will sure be interesting. 1: http://money.cnn.com/2017/06/27/technology/business/google-eu-antitrust-fine/index.html http://money.cnn.com/2017/06/27/technology/business/google-e... 2: https://www.nytimes.com/2017/08/30/us/politics/eric-schmidt-google-new-america.html?mcubz=0 https://www.nytimes.com/2017/08/30/us/politics/eric-schmidt-...
- zrail 9y agoSeems likely. This way if/when Google LLC gets hit by massive antitrust fines the rest of the Alphabet subsidiaries will be insulated.
- ma2rten 9y agoWhy does it matter?
- tryingagainbro 9y agothe rest of the Alphabet subsidiaries will be insulated. they already are...relatively speaking they make no money.
- throwaway40483 9y agoThis would make sense if the other entities were actually making, which they don't. Cut the ties to Google and everything else dies.
- dragonwriter 9y agoSince Google makes all the money, that's the opposite of the important direction of insulation. This way if one of the other bets incurs massive liabilities, Google's assets and income streams are insulated.
- xyzzy_plugh 9y agoI feel like Google's naming is clashing with Amazon's: - Amazon's "smile" points from A to Z. - Google's parent is Alphabet. - A2Z Development Center Inc is Amazon's holding company for a number of subsidiaries. - Google's holding company is XXVI -- there are 26 letters in the English alphabet. - Lab126 is Amazon's digital product development arm. 126 meaning letters 1 through 26. Surely the leaders of some of the largest tech companies can come up with better names -- or is naming truly one of the hardest problems in computer science?
- goptimize 9y agoYep, 26 is also a numerical value of YHVH, i.e., Yahweh :)
- SuperPaintMan 9y agoThank you for reminding me to go watch Pi again.
- tasty-fajita 9y agothe holding "Company" of the "holding companies" likes cryptograms and these are actually pretty good. "clash" implies "two" parties but if there is only one then it is consistent. "XXVI" for "2" => "13" + "13". naming is hard and these are fine names. they need no "introduction".
- tasty-fajita 9y agoyears later gai machines dig up old hn archives and wonder at the stupidity of the downvoters :)
- josephjrobison 9y agoShould have been something like Hooli
- iamatroll_ama 9y ago
- goptimize 9y ago26 is also a (well-known) numerical value of YHVH, i.e., Yahweh :) 10 (yōḏ) + 5 (hē) + 6 (wāw) + 5 (hē) = 26
- martin1975 9y agoSince the latest censorship debacle, I have begun to resent Google on principle. They certainly had everyone fooled with their "Don't be evil" theme. No such thing. What is needed now is an update to our laws that will prohibit carriers/hosts of information from censoring content that does not violate the First Amendment, the way GAB is doing it. GAB's efforts are worthy of an applause, however, they are a lone wolf, a reaction to the usurpers at Google, Twitter, Facebook, Apple, etc. Speaking in disagreement with whomever on the internet isn't the same as speaking in disagreement in someone's house where you can most certainly kick the person out, or speaking in disagreement with your employer, James Damore style and getting fired for upsetting the groupthink. The wireless spectrum should be sold with these guarantees of freedom of speech attached and new laws needs to be passed that will NEVER again allow Google, Facebook, Twitter, Apple or whomever, regardless of size, to usurp America's most precious freedom.
- thrownblown 9y agoGAB = google/alphabet
- joshuamorton 9y agoGab is a free speech/alt right twitter clone.
- thrownblown 9y agoexactly
- gesman 9y agoGoogle is clearly betting on non-search-engine enterprises for years to come
- basicplus2 9y agoGreat way to reduce liability
- noja 9y agoWhy is this necessary? I thought Alphabet was meant to eventually achieve this, what makes the extra company necessary?
- trapperkeeper74 9y agoRe-org: the universal sign of management theater or hiding the cash before the cops come.
- dmix 9y agoLLC's will hardly protect your cash from law enforcement action vs the previous set up. I believe it's just updating the business structure right down to the low level corporate/legal structure to reflect their multiple silo'd "bets" business strategy. It doesn't seem so nefarious if everything else is already functioning that way in practice.
- rubzah 9y agoIf I'm an Alphabet shareholder, did I just lose my stake in Waymo et al? It seems they are now no longer subsidiaries of Alphabet? That would be a big deal.
- dmix 9y agoFrom the article: > She called the process a legal formality that won’t affect ultimate shareholder control, operations, management or personnel at the 75,606-person company.
- ahakki 9y agoThey are still subsidiaries of Alphabet. Previously the structure was like this: Alphabet | Google | Other Bets Now it will be: Alphabet | ——————————————— | | Google XXVI Hldg. | Other Bets
- pgnas 9y agoFunny, I was betting on the new name to be "SkyNet".
- at-fates-hands 9y agoThis is probably all you need to know from this article: Now, it’s owned by Alphabet, so it effectively has only one investor and no public disclosure obligations.