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Should Google just become a VC fund?

29 points by likecarter 5y ago

mraza007 5y ago
Very interesting points made here. Those startups can thrive independently under Google
9wzYQbTYsAIc 5y ago
Google’s parent company is still Alphabet, right? Wasn’t Alphabet created to be a pseudo-VC fund for all of the non-core research and development projects that Google had going on?
- impulser_ 5y ago
  Alphabet is a holding company. They created Alphabet to stop from having to put everything under the Google name. CapitalG is their VC fund.
H8crilA 5y ago
> While the information isn’t public, we can safely assume that less than 5%, or 2,954 engineers, work directly or indirectly on Google Ads (Google Search, Youtube, etc.). Where does this assumption come from? I don't think this is even remotely close to the truth.
- asdfasgasdgasdg 5y ago
  Yeah I mean there are probably a thousand people working explicitly and directly on web search alone, not to mention all the auxiliary work that goes into supporting websearch. This assumption is very incorrect.
- stingraycharles 5y ago
  Yeah it’s a hilariously incorrect article. Even if it were 5% engineers, the article presents it as if all the non-engineers are excess weight that don’t do anything useful.
- deleted 5y ago
  [deleted]
- calbear81 5y ago
  I think we should explain this more clearly to the original author; it’s probably true that maybe 5% work on ads but that is literally the ads system like Adwords and Adsense. The only reason those are valuable is that Google has tons of traffic and that traffic is driven by the work of the other 95% working on sub-verticals, core search, Youtube, etc. If you take away the people working on those these services would stagnate and people will start going to another search engine and then you lose revenue.
strstr 5y ago
Isn't this Google Ventures? (https://www.gv.com/ https://www.gv.com/)
- astrange 5y ago
  Also X and Alphabet itself. As usual for Google they have five copies of the same thing.
  - meheleventyone 5y ago
    They also have a internal startup incubator thing as well called Area 120.
cortesoft 5y ago
This makes some big assumptions. One, that all the engineers both want and have the skill set to run a startup. Two, that those engineers have that many promising ideas for startups.
Abhinav2000 5y ago
Google Ads is the monetisation of all of the other services Google offers. Everything is a funnel of information to Google's Ad Analytics
gregsadetsky 5y ago
"Alphabet generated almost $183 billion in revenue. Of that, 147B — over 80% — came from Google’s ads business" So, the other 20% non-ad revenue (GCP? Google Workspace? Google Play subscriptions?) represents 36.6B The article however argues that the 6 billion dollar startups would generate 28.5B in value -- so, less than the (supposedly) 95% of non-ad engineers generate right now..? And this would also mean that there would be nobody left to run and maintain Search, Android, YouTube, Gmail, Maps, Chrome, Drive, GCP, Google's entire infrasructure, ...?
- yibg 5y ago
  Not to mention, why would 5 google engineers dilute almost 50% right off the bat just to get 1 year of L3 salary?
truenindb 5y ago
<ahem> I think you mean should all of the ridiculously inflated by wall street "platform" companies instead be commercial banks in a less monopolistic actual market economy?
binbag 5y ago
This is a dumb, provocative question to which the answer is simply ‘no’.
coxley 5y ago
This article also underestimates how quickly you can move with the resources of a large company. DB management and scaling? Another team takes care of that and offers an easy to use service. Large pool of server resources to experiment with? Done. Breaking up entities get rid of this.
rawtxapp 5y ago
Google does have it's own internal "VC fund" (Area 120) which has yet to produce anything of significance. Not a lot of engineers actually want to start their own company, they are happy to just come and engineer new products/services dictated by PMs/leadership/etc.
- akomtu 5y ago
  I'm pretty sure they do want to run their own companies, but they can't afford to lose health insurance and they gotta pay their grossly overpriced mortgages.
caturopath 5y ago
I think I regret giving this site traffic.
- 9wzYQbTYsAIc 5y ago
  Thank you for validating my decision not to.
paultopia 5y ago
In addition to the terrible flaws with this thing that everyone else has pointed out (summary: "all the other stuff google does is necessary for the ads revenue to continue"), isn't this basically what 20% time was? I mean, formally different in that Google kept a 100% stake in anything that was produced that way, but pretty close.
relaunched 5y ago
This seems to be riddled with assumptions that suggest a lack of experience with enterprise-sized companies. Good built an ecosystem of products that capture your attention...so that they can monetize your attention. They also have Google Cloud, which is quickly converging with all of Google's productivity tools. Lastlt, why would Google ever exit a business that's generating so much cash?

29 points by likecarter 5y ago

Very interesting points made here. Those startups can thrive independently under Google

Google’s parent company is still Alphabet, right? Wasn’t Alphabet created to be a pseudo-VC fund for all of the non-core research and development projects that Google had going on?

impulser_ 5y ago
Alphabet is a holding company. They created Alphabet to stop from having to put everything under the Google name. CapitalG is their VC fund.

H8crilA 5y ago

> While the information isn’t public, we can safely assume that less than 5%, or 2,954 engineers, work directly or indirectly on Google Ads (Google Search, Youtube, etc.). Where does this assumption come from? I don't think this is even remotely close to the truth.

asdfasgasdgasdg 5y ago
Yeah I mean there are probably a thousand people working explicitly and directly on web search alone, not to mention all the auxiliary work that goes into supporting websearch. This assumption is very incorrect.
stingraycharles 5y ago
Yeah it’s a hilariously incorrect article. Even if it were 5% engineers, the article presents it as if all the non-engineers are excess weight that don’t do anything useful.
deleted 5y ago
[deleted]
calbear81 5y ago
I think we should explain this more clearly to the original author; it’s probably true that maybe 5% work on ads but that is literally the ads system like Adwords and Adsense. The only reason those are valuable is that Google has tons of traffic and that traffic is driven by the work of the other 95% working on sub-verticals, core search, Youtube, etc. If you take away the people working on those these services would stagnate and people will start going to another search engine and then you lose revenue.

strstr 5y ago

Isn't this Google Ventures? (https://www.gv.com/ https://www.gv.com/)

astrange 5y ago
Also X and Alphabet itself. As usual for Google they have five copies of the same thing.
- meheleventyone 5y ago
  They also have a internal startup incubator thing as well called Area 120.

cortesoft 5y ago

This makes some big assumptions. One, that all the engineers both want and have the skill set to run a startup. Two, that those engineers have that many promising ideas for startups.

Abhinav2000 5y ago

Google Ads is the monetisation of all of the other services Google offers. Everything is a funnel of information to Google's Ad Analytics

gregsadetsky 5y ago

"Alphabet generated almost $183 billion in revenue. Of that, 147B — over 80% — came from Google’s ads business" So, the other 20% non-ad revenue (GCP? Google Workspace? Google Play subscriptions?) represents 36.6B The article however argues that the 6 billion dollar startups would generate 28.5B in value -- so, less than the (supposedly) 95% of non-ad engineers generate right now..? And this would also mean that there would be nobody left to run and maintain Search, Android, YouTube, Gmail, Maps, Chrome, Drive, GCP, Google's entire infrasructure, ...?

yibg 5y ago
Not to mention, why would 5 google engineers dilute almost 50% right off the bat just to get 1 year of L3 salary?

truenindb 5y ago

<ahem> I think you mean should all of the ridiculously inflated by wall street "platform" companies instead be commercial banks in a less monopolistic actual market economy?

binbag 5y ago

This is a dumb, provocative question to which the answer is simply ‘no’.

coxley 5y ago

This article also underestimates how quickly you can move with the resources of a large company. DB management and scaling? Another team takes care of that and offers an easy to use service. Large pool of server resources to experiment with? Done. Breaking up entities get rid of this.

rawtxapp 5y ago

Google does have it's own internal "VC fund" (Area 120) which has yet to produce anything of significance. Not a lot of engineers actually want to start their own company, they are happy to just come and engineer new products/services dictated by PMs/leadership/etc.

akomtu 5y ago
I'm pretty sure they do want to run their own companies, but they can't afford to lose health insurance and they gotta pay their grossly overpriced mortgages.

caturopath 5y ago

I think I regret giving this site traffic.

9wzYQbTYsAIc 5y ago
Thank you for validating my decision not to.

paultopia 5y ago

In addition to the terrible flaws with this thing that everyone else has pointed out (summary: "all the other stuff google does is necessary for the ads revenue to continue"), isn't this basically what 20% time was? I mean, formally different in that Google kept a 100% stake in anything that was produced that way, but pretty close.

relaunched 5y ago

This seems to be riddled with assumptions that suggest a lack of experience with enterprise-sized companies. Good built an ecosystem of products that capture your attention...so that they can monetize your attention. They also have Google Cloud, which is quickly converging with all of Google's productivity tools. Lastlt, why would Google ever exit a business that's generating so much cash?