Googley Spin-Offs Underwhelm
September 29, 2016
One might think that starting out as a derivative of one of the most successful companies in the world would be a sure path to profits. Apparently one would be wrong. The Telegraph reports, “Alphabet’s Spin-Offs are Struggling to Repeat the Google Success Story.” Readers will recall that Alphabet was created last year as the holding company for Google and its derivatives, like Calico, Google Capital, Nest, Google Ventures, Verily, and X. Writer James Titcomb explains the logic behind the move:
The theory behind Alphabet, when Page laid it out in August, made sense. Google had become more than just an internet services and advertising company, even though the main internet business still made all the money. Google had set up units such as Calico, a life sciences division trying to eradicate death; Project Loon, which is trying to beam the internet to rural Asia with gigantic space balloons; and Boston Dynamics, which is trying to build humanoid robots.
These ‘moonshots’ weren’t able to realize their potential within the confines of a company focused on selling pay-per-click internet advertising, so they were separated from it. Page and Sergey Brin, Google’s two co-founders, left the everyday running of the internet business to their trusted lieutenant, Sundar Pichai, who had been effectively doing it anyway.
Being liberated from Google, the moonshots were supposed to thrive under the Alphabet umbrella. Have they? The early signs are not good.
The article concedes that Alphabet expected to lose money on some of these derivative projects, but notes that the loss has been more than expected—to the tune of some $3.6 billion. Titcomb examines Nest, Google’s smart-thermostat initiative, as an example; its once-bright future is not looking up at the moment. Meanwhile, we’re reminded, Apple is finding much success with its services division. See the article for more details on each company.
Will Alphabet continue to use Google Search’s stellar profits to prop up its pet projects? Consider that, from the beginning, one of the companies’ winning strategies has been to try anything and run with what proves successful; repeated failure as a path to success. I predict Alphabet will never relinquish its experimental streak.
Cynthia Murrell, September 29, 2016
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
Digging for a Direction of Alphabet Google
April 21, 2016
Is Google trying to emulate BAE System‘s NetReveal, IBM i2, and systems from Palantir? Looking back at an older article from Search Engine Watch, How the Semantic Web Changes Everything for Search may provide insight. Then, Knowledge Graph had launched, and along with it came a wave of communications generating buzz about a new era of search moving from string-based queries to a semantic approach, organizing by “things”. The write-up explains,
“The cornerstone of any march to a semantic future is the organization of data and in recent years Google has worked hard in the acquisition space to help ensure that they have both the structure and the data in place to begin creating “entities”. In buying Wavii, a natural language processing business, and Waze, a business with reams of data on local traffic and by plugging into the CIA World Factbook, Freebase and Wikipedia and other information sources, Google has begun delivering in-search info on people, places and things.”
This article mentioned Knowledge Graph’s implication for Google to deliver strengthened and more relevant advertising with this semantic approach. Even today, we see the Alphabet Google thing continuing to shift from search to other interesting information access functions in order to sell ads.
Megan Feil, April 21, 2016
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
Google Drastically Slows Acquisition Spending
December 3, 2015
As Google becomes Alphabet, the company seems to be taking a new approach to its investments. Business Insider declares, “Google Slammed the Brakes on its Acquisition Machine, with the Lowest Deal-Making Since 2009.” The article references Google’s 10Q quarterly earnings report, and compares that quarter’s acquisition total of $250 million to the company’s speeding sprees of years past; see the post for details. Writer Alexai Oreskovic observes:
“The M&A slowdown comes as Google has transformed itself into the Alphabet holding company, which separates various Google projects, such as fiber-based internet access, and Nest into separate companies. It also comes as new CFO Ruth Porat has taken steps to make Google more disciplined about its spending, and to return some cash to shareholders through buybacks. Stock buybacks and slowing M&A — perhaps this is the new Google. Or perhaps Google is just taking a breather on its acquisitions to digest all the companies it has swallowed up over the years. Asked about the slowing M&A, a Google representative responded by email: ‘Acquisitions by their nature are inherently lumpy and don’t follow neat 9 month patterns.’”
Well, that’s true, I suppose, as far as it goes. We hope this turn to fiscal discipline does not portend trouble for Google/ Alphabet. What is the plan? We are curious to see where the company goes from here.
Cynthia Murrell, December 3, 2015
Sponsored by ArnoldIT.com, publisher of the CyberOSINT monograph
-
- Subscribe to Beyond Search
Feature archive
News archive
-
