Shareholders are not rational, and CEOs believe shareholders to be even more irrational than they actually are. There's plenty of research showing that CEOs do

Shareholders are not rational, and CEOs believe shareholders to be even more irrational than they actually are. There's plenty of research showing that CEOs do things they think looks good to investors, despite evidence to the contrary. What happens to come to mind is research of FIFO v. LIFO inventory. One understates income at the benefit of having a lower tax liability, and the other overstates income to investors at the cost of paying more in taxes. Statistically, investors punish CEOs for leaving tax cuts on the table for an amount greater than the value of the supposed tax savings, while CEOs insist the opposite is true and that investors are rewarding them for overstating income. Managing your books is widespread and commonplace. People downsize, hide liabilities, massage earnings, and do irrational things regardless of not just long-term consequences, but often on the basis of perceived consequences. In this particular case, though, you're probably right. Android itself was one of those whacky ideas that no one expected to gain any traction. Google funds moonshot projects as a matter of company culture and self-identity and it seems to actually make them money. Of course, the possibility still exists to cut them for short-term gain and I doubt no one factors that into their equation at all.