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Since nobody has pointed out the obvious: buying things for $1 in the business world means that the thing has negative book value (= its liabilities exclude its

Since nobody has pointed out the obvious: buying things for $1 in the business world means that the thing has negative book value (= its liabilities exclude its assets), but not so much that you'd want to structure the sale the other way around (= Provo paying Google to get rid of the thing). So Google's not getting $39m worth of stuff for $1, they're getting $39m worth of assets plus $Nm worth of liabilities (where n > 39) for $1. See also: http://en.wikipedia.org/wiki/Peppercorn_(legal) http://en.wikipedia.org/wiki/Peppercorn_(legal) Also, paying $39m to build something doesn't mean the resulting asset is actually worth $39m any more, but that's another story. (And obligatory disclaimer: I have no personal knowledge of how the valuation was actually made.)

fjarlq 14y ago
> So Google's not getting $39m worth of stuff for $1, they're getting $39m worth of assets plus $Nm worth of liabilities (where n > 39) for $1. Pete Ashdown of Xmission says "Google will not assume any of the debt, the Provo city taxpayer will continue paying that." http://transmission.xmission.com/2013/04/18/the-1-fiber-optic-network http://transmission.xmission.com/2013/04/18/the-1-fiber-opti... Who is right? I haven't looked into it.
- YeahKIA 14y ago
  You can't blame google if the government officials were stupid enough to not extract the right value out if their assets
  - lmm 14y ago
    Watch me. I suspect there are many people here who had the opportunity to rip a client off but chose to instead do the right thing.
- hristov 14y ago
  I think the issue is that the city paid a bunch of money to build the system but still cannot run it for a profit. So the city has to keep paying ongoing losses for the system in order to run it. They can shut it down of course, but that would be a big black eye for the politicians. So they gave it away to Google, who promised to run it and provide free internet to people for a very low setup fee.
ars 14y ago
What I want to know is if Google will actually give them a $1 bill.

fjarlq 14y ago

> So Google's not getting $39m worth of stuff for $1, they're getting $39m worth of assets plus $Nm worth of liabilities (where n > 39) for $1. Pete Ashdown of Xmission says "Google will not assume any of the debt, the Provo city taxpayer will continue paying that." http://transmission.xmission.com/2013/04/18/the-1-fiber-optic-network http://transmission.xmission.com/2013/04/18/the-1-fiber-opti... Who is right? I haven't looked into it.

YeahKIA 14y ago
You can't blame google if the government officials were stupid enough to not extract the right value out if their assets
- lmm 14y ago
  Watch me. I suspect there are many people here who had the opportunity to rip a client off but chose to instead do the right thing.
hristov 14y ago
I think the issue is that the city paid a bunch of money to build the system but still cannot run it for a profit. So the city has to keep paying ongoing losses for the system in order to run it. They can shut it down of course, but that would be a big black eye for the politicians. So they gave it away to Google, who promised to run it and provide free internet to people for a very low setup fee.

ars 14y ago

What I want to know is if Google will actually give them a $1 bill.