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Once you get to Google or Apple scale, you’re essentially a government and run into the same problems with central planning that governments do. It’s absolutely

Once you get to Google or Apple scale, you’re essentially a government and run into the same problems with central planning that governments do. It’s absolutely the right move to return the money to shareholders and let them reallocate it to more economically promising endeavors. That doesn’t make a statement about innovation stagnation on the whole, it just reflects the reality of diminishing returns to scale.

dmix 7y ago
Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. No mega company really has to have internal innovation. And I doubt the pretend internal startups ala skunkswork with an unlimited budget and extensive runways are a real replacement for innovation popping out of the marketplace among the bodies of a hundred other failed/acquihired startups.
- cameronbrown 7y ago
  > Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. Firebase (acquired in 2014) seems to qualify as semi-recent given it's become a massive product line in a few years.
  - ethbro 7y ago
    Buying best of breed solutions that integrate with their cloud is as good an ever-present option as I can think of. It adds value to their cloud, is responsive to actual customer desires, and generally seems like a bargain at the right stage (a Google-supported tool being more valuable than a third-party GCP tool, even with Google's questionable dedication to longevity). Just don't make the IBM / MS mistake and think adding more PMs to previously successful company is a good idea.
- Shounak 7y ago
  Notably they also recently acquired Looker
- ErikVandeWater 7y ago
  Strongly agree! There are an almost unlimited number of things to do with money. Even if you have lots of money, the number of good opportunities exceeds the amount of cash. It doesn't even have to be high-risk acquisitions - Just anything that will get a good return.
- scarface74 7y ago
  Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. With all of the failed and failing products from Google acquisitions, is that really a great idea?
  - dmix 7y ago
    Probably not for the product's consumers, no.
- AnthonyMouse 7y ago
  > Why not buy some companies and get some proper entrepreneurs back into the mix of management? Because it's inefficient. Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers, so it makes no sense to put it under the same roof. The same management staff isn't going to be effective in managing both types of business, all it's going to do is split their focus. But give the money to the shareholders and the ones who want to can use it to invest in biotech, others can invest in electric cars or new types of power generation or energy storage or space exploration or whatever else. Using the profits from search engines to fund cancer research and space exploration is great. Running those businesses inside the search engine company is pointless.
  - inlined 7y ago
    > Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers Yet it has a lot to do with Calico, another Alphabet company.
    - AnthonyMouse 7y ago
      That's just them doing the silly thing they ought not to be doing. What synergy exists that causes Calico to be better off as part of Alphabet instead of as an independent company? What if I want to invest in Calico but not Google, or vice versa? All it's doing is making the market less efficient.
  - whatshisface 7y ago
    Google investors won't be able to invest in high-risk biotech startups if they aren't accredited. Everyday investors are only allowed to access weird investments through the left-field bets of big companies.
    - meddlepal 7y ago
      Becoming an accredited investor doesn't take a lot of money... I would bet a good chunk of this site qualifies under the rules.
zhoujianfu 7y ago
This just struck me as the same reason UBI is a great policy for governments. Just distribute the cash people, you’re too big to allocate it well!
- vasco 7y ago
  That's just an argument for lowering taxes.
  - jonny_eh 7y ago
    No, that's assuming that the free market is best at distributing wealth. Evenly distributing at least some of the money isn't the same as "spending" it.
    - gwright 7y ago
      The casual assumption that it is appropriate for government to tax people in order to distribute wealth "evenly" is disturbing. I'm reacting to the "even distribution" notion not taxing in general. I think there are legitimate reasons for government to collect taxes but ensuring even distribution of wealth isn't one of them, IMHO.
      - rorykoehler 7y ago
        Uni is even to a cap which is completely different than even. Making sure everyone has enough to comfortably survive without restricting high earners from chasing riches is not the same as evenly distributing wealth.
      - jonny_eh 7y ago
        There's a difference between evenly distributing ALL money, as in communism, and a minimum so that people don't need to suffer in poverty. You're making a value judgement that it's worse to distribute some tax dollars than to turn a blind eye to poverty.
        7y ago
gingabriska 7y ago
Returning money would create inflation for acquiring future cash cows (think : firebase) Imagine, if Google returned money then investor gets the money and now they try to invest it somewhere else, highly likely, these guys will go after companies which Google want to buy out. Why make it expensive for yourself to buy your threats? The idea is that investment opportunities are shrinking, more money in market for limited opportunity is what creates inflation, makes it expensive for everyone to acquire new companies. It's specially true for big tech companies where pension funds and other investment fund own large chunk of stock, if they get the money, they'll put it in venture capital or private equity which either increases cost to acquire technology (patents etc...) Or existing businesses.
- docker_up 7y ago
  Google has already created inflation from their stock price. The houses in the Bay Area have doubled in 5 years precisely because FANG engineers have had their shares skyrocket 6-10x, so they buy multiple houses.
  - gingabriska 7y ago
    I am not talking about this kind of inflation. I am talking specifically about inflation for purchasing future cash cows.

dmix 7y ago

Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. No mega company really has to have internal innovation. And I doubt the pretend internal startups ala skunkswork with an unlimited budget and extensive runways are a real replacement for innovation popping out of the marketplace among the bodies of a hundred other failed/acquihired startups.

cameronbrown 7y ago
> Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. Firebase (acquired in 2014) seems to qualify as semi-recent given it's become a massive product line in a few years.
- ethbro 7y ago
  Buying best of breed solutions that integrate with their cloud is as good an ever-present option as I can think of. It adds value to their cloud, is responsive to actual customer desires, and generally seems like a bargain at the right stage (a Google-supported tool being more valuable than a third-party GCP tool, even with Google's questionable dedication to longevity). Just don't make the IBM / MS mistake and think adding more PMs to previously successful company is a good idea.
Shounak 7y ago
Notably they also recently acquired Looker
ErikVandeWater 7y ago
Strongly agree! There are an almost unlimited number of things to do with money. Even if you have lots of money, the number of good opportunities exceeds the amount of cash. It doesn't even have to be high-risk acquisitions - Just anything that will get a good return.
scarface74 7y ago
Why not buy some companies and get some proper entrepreneurs back into the mix of management? I can't remember any recent major Google acquisitions. With all of the failed and failing products from Google acquisitions, is that really a great idea?
- dmix 7y ago
  Probably not for the product's consumers, no.
AnthonyMouse 7y ago
> Why not buy some companies and get some proper entrepreneurs back into the mix of management? Because it's inefficient. Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers, so it makes no sense to put it under the same roof. The same management staff isn't going to be effective in managing both types of business, all it's going to do is split their focus. But give the money to the shareholders and the ones who want to can use it to invest in biotech, others can invest in electric cars or new types of power generation or energy storage or space exploration or whatever else. Using the profits from search engines to fund cancer research and space exploration is great. Running those businesses inside the search engine company is pointless.
- inlined 7y ago
  > Google could buy a thousand biotech startups that are all doing innovative work trying to cure cancer and things like that, but that work has nothing to do with search engines or data centers Yet it has a lot to do with Calico, another Alphabet company.
  - AnthonyMouse 7y ago
    That's just them doing the silly thing they ought not to be doing. What synergy exists that causes Calico to be better off as part of Alphabet instead of as an independent company? What if I want to invest in Calico but not Google, or vice versa? All it's doing is making the market less efficient.
- whatshisface 7y ago
  Google investors won't be able to invest in high-risk biotech startups if they aren't accredited. Everyday investors are only allowed to access weird investments through the left-field bets of big companies.
  - meddlepal 7y ago
    Becoming an accredited investor doesn't take a lot of money... I would bet a good chunk of this site qualifies under the rules.

zhoujianfu 7y ago

This just struck me as the same reason UBI is a great policy for governments. Just distribute the cash people, you’re too big to allocate it well!

vasco 7y ago
That's just an argument for lowering taxes.
- jonny_eh 7y ago
  No, that's assuming that the free market is best at distributing wealth. Evenly distributing at least some of the money isn't the same as "spending" it.
  - gwright 7y ago
    The casual assumption that it is appropriate for government to tax people in order to distribute wealth "evenly" is disturbing. I'm reacting to the "even distribution" notion not taxing in general. I think there are legitimate reasons for government to collect taxes but ensuring even distribution of wealth isn't one of them, IMHO.
    - rorykoehler 7y ago
      Uni is even to a cap which is completely different than even. Making sure everyone has enough to comfortably survive without restricting high earners from chasing riches is not the same as evenly distributing wealth.
    - jonny_eh 7y ago
      There's a difference between evenly distributing ALL money, as in communism, and a minimum so that people don't need to suffer in poverty. You're making a value judgement that it's worse to distribute some tax dollars than to turn a blind eye to poverty.
      - 7y ago

gingabriska 7y ago

Returning money would create inflation for acquiring future cash cows (think : firebase) Imagine, if Google returned money then investor gets the money and now they try to invest it somewhere else, highly likely, these guys will go after companies which Google want to buy out. Why make it expensive for yourself to buy your threats? The idea is that investment opportunities are shrinking, more money in market for limited opportunity is what creates inflation, makes it expensive for everyone to acquire new companies. It's specially true for big tech companies where pension funds and other investment fund own large chunk of stock, if they get the money, they'll put it in venture capital or private equity which either increases cost to acquire technology (patents etc...) Or existing businesses.

docker_up 7y ago
Google has already created inflation from their stock price. The houses in the Bay Area have doubled in 5 years precisely because FANG engineers have had their shares skyrocket 6-10x, so they buy multiple houses.
- gingabriska 7y ago
  I am not talking about this kind of inflation. I am talking specifically about inflation for purchasing future cash cows.