
Alphabet Finishes Reorganization with New XXVI Company - tareqak
https://www.bloomberg.com/news/articles/2017-09-01/alphabet-wraps-up-reorganization-with-a-new-company-called-xxvi
======
wyattk
This seems like it is Google preparing itself for a future where it will
almost certainly be hit with the antitrust hammer here in the US. Google has
been getting increasing pressure from the EU [1]. It, at least in the public's
eye, has been showing more monopolistic behavior and getting more attention,
like discussed here [2]. There has been talk of Amazon and Facebook facing
similar antitrust issues in the future too, but those seem to be quieter.

The future is uncertain, but this will sure be interesting.

1:
[http://money.cnn.com/2017/06/27/technology/business/google-e...](http://money.cnn.com/2017/06/27/technology/business/google-
eu-antitrust-fine/index.html) 2:
[https://www.nytimes.com/2017/08/30/us/politics/eric-
schmidt-...](https://www.nytimes.com/2017/08/30/us/politics/eric-schmidt-
google-new-america.html?mcubz=0)

~~~
flexie
Google used to be this unique company that again and again would launch
exciting new services or products. Often it was services that helped them sell
ads, but it was services that users found very helpful.

Gmail, Google Translate, Google Map, Google Earth, Chrome, Android. These were
all unique in their own way when they came out and found hundreds of millions
(mostly free or low paying) users.

But what is the one thing or service that you use from Google which was
launched in the last 5 years and are widely used? Nothing.

What is the one thing that they charge for, except advertising, and that
scores of people care to pay for? Nothing.

Sure, there have been ongoing improvements of their services and lots of
tools, languages and frameworks released for developers. They have been
testing self driving cars and there have been rumours about what they do in
their lab. There have been laptops, glasses and loudspeakers, but none of them
have really been successful or close to be considered market leaders.

Apparently, it's really difficult for one of the richest companies in history
with tens of thousands of the most talented engineers, to market just one new
product every few year. Was there ever in history so much money gathered so
easily by such an amazing force of engineers?

Even within software services that you would think a global company with the
largest user base ever, and millions of paying webshops, could dominate; Why
is Google not a leader in payment technology? Why are they not dominating
hosting services? Why are they not dominating cloud storage? Why don't we buy
content such as books, news, movies or songs on Google? Shared economy? Social
networks? Why are they not dominating anything else but a few software
services that help them sell their core product, the ads?

Google can make such huge amounts of much money selling ads, that everything
else is dwarfed in comparison. How could you ever get the attention of
management for a project that could potentially - if everything goes well for
5-10 years - make 5 billion in revenue, when Google makes more than that in a
month right now?

Not despite of their money but because of their money, Google cannot innovate.
Take 1,000 Google engineers elsewhere and they could do amazing things. Have
them in Google, and the world would barely notice if they all called in sick
for the next 10 years.

Maybe Google's restructuring will help on this. I doubt it, unless the
umbilical cord to all the advertisement money is cut completely. Size matters.
Google has gotten way too big.

~~~
nindalf
I have to disagree with this characterization. I don't work for Google but it
is apparent that a lot of work goes into their products. You don't necessarily
need to launch a new product to show impact. Improving existing ones is plenty
great too, even if these improvements aren't as apparent as product launches.
For example, we take for granted that the Google assistant can understand most
things we say to it. By this time next year it would have gained a bunch of
new capabilities that we would also take for granted, except more people would
likely be using it and they'd be happier with it than they are today.

On one hand you acknowledge that they are constantly improving existing
software, launching new hardware, new frameworks, new tools and on the other
you criticise them for "not launching even one product". It's strange because
I've actually heard the opposite criticism of Google on HN, that they launch
too many products and don't focus enough on existing ones.

~~~
akvadrako
Many Google products are getting worse. The Maps UI isn't as good as 5 years
ago. Search doesn't find things as well as it used to. And competitors are
catching up. The developer libraries and languages they have released are all
2nd rate.

The grandparent is right - they basically haven't been able to capitalise on
their incredibly strong position, except by becoming better as selling ads.

~~~
3pt14159
The UI might be worse, but everything else about Maps is better. It knows
where front doors are, you can get directions through buildings if you're
walking, it's far more traffic-aware, you can schedule when you want to arrive
somewhere and it's public transit is smart enough to adjust for available
busses, it works in areas of the world like Kiev with Latin or Cyrillic
spelling, it has photos of the insides of most places, you can send the
directions to your phone and it opens in the maps app there.

My only major complaint about maps is that it isn't friendly to people with
limited data. Tapping on a restaurant in Thailand where I might have 50 megs
of data for the whole month loads around 1-3 megs of images when all I want to
do is see what time it opens. There are minor UI annoyances but overall Maps
is a much, much better product than 5 years ago.

------
xyzzy_plugh
I feel like Google's naming is clashing with Amazon's:

\- Amazon's "smile" points from A to Z.

\- Google's parent is Alphabet.

\- A2Z Development Center Inc is Amazon's holding company for a number of
subsidiaries.

\- Google's holding company is XXVI -- there are 26 letters in the English
alphabet.

\- Lab126 is Amazon's digital product development arm. 126 meaning letters 1
through 26.

Surely the leaders of some of the largest tech companies can come up with
better names -- or is naming truly one of the hardest problems in computer
science?

~~~
tpeo
Naming is the hardest problem of all possible universes, in all possible
universes.

~~~
thrownblown
Q: what are the two greatest challenges to software engineering?

A: cache invalidation, naming things and off by one errors.

------
tareqak
Techmeme Summary: _Alphabet creates XXVI Holdings Inc. through which it will
separate “Other Bets” from Google and become direct owner of subsidiaries like
Waymo and Verily_

------
fred256
Why did they change things _again_ or is this simply a 2-year process that is
only now completing?

~~~
mtrpcic
The article explains it, but it's not 100% clear why the extra step was
needed.. "Google co-founder Larry Page announced Alphabet two years ago to
foster new businesses that operate independently from Google. Technically,
however, those units, called the “Other Bets,” were still subsidiaries of
Google." With this new change, XXVI Holdings will hold the equity for all
child companies, rather than Google still being the owner.

~~~
zrail
Until now the only Alphabet subsidiary was Google Inc. The other bets were
still Google Inc subsidiaries. This move brings them up a level and separates
them from Google.

~~~
BurningFrog
Looks like a pretty clean refactoring to me!

~~~
akvadrako
I don't see why they don't just put all their subsidiaries under Alphabet.
What is the purpose of Alphabet if not a holding company?

~~~
digitalzombie
It's in the article.

Alphabet owns google and the other bets.

If one of the LLC under Alphabet get sued it doesn't effect the other LLC
(bets or Google).

~~~
akvadrako
That doesn't explain anything.

------
noja
Why is this necessary? I thought Alphabet was meant to eventually achieve
this, what makes the extra company necessary?

------
goptimize
The following sentence sounds like they plan to achieve a less transparent
situation "The switch is partly related to Google’s transformation from a
listed public company into a business owned by a holding company" therefore
they buy back their stocks.

~~~
zrail
It's not any less transparent. Afaict, Alphabet Inc is the listed holding
company of Google LLC and XXVI Holdings. XXVI holds the Other Bets
subsidiaries that used to be Google Inc subsidiaries. Google the entity no
longer has any non-Google subsidiaries so they're simplifying and streamlining
Google operations by changing it into an LLC.

~~~
goptimize
LLC cannot issue stock, right? If you buy back all stocks then you don't need
to provide detailed public reports except to major stockholders?

~~~
zrail
Alphabet is the only owner of Google Inc stock. They're retiring it all and
converting the Google subsidiary to an LLC. That in no way removes their
reporting requirements, because Alphabet is a publicly traded company.

~~~
kgwgk
The reporting requirements will be reduced, though. Alphabet reports
consolidated results and you don’t get the same level of detail for each
subsidiary as you would for an independet company.

------
Flammy
Does this feel like a "friday news dump" to anyone else?

~~~
maxerickson
No, it seems pretty mundane to me.

~~~
akvadrako
A major restructuring of one of the largest companies ever is not mundane.

------
neom
Nice revenue reporting re-structuring! Very curious to see where this goes,
that was a lot of work to blurry line items.

------
at-fates-hands
This is probably all you need to know from this article:

 _Now, it’s owned by Alphabet, so it effectively has only one investor and no
public disclosure obligations._

------
rubzah
If I'm an Alphabet shareholder, did I just lose my stake in Waymo et al? It
seems they are now no longer subsidiaries of Alphabet?

That would be a big deal.

~~~
ahakki
They are still subsidiaries of Alphabet. Previously the structure was like
this:

    
    
        Alphabet
            |
         Google
            |
        Other Bets
    

Now it will be:

    
    
             Alphabet
                 |
          ———————————————
          |             |
        Google         XXVI Hldg.
                            |
                       Other Bets

~~~
Geekette
Wrong.

 _" The new entity, called XXVI Holdings Inc., will own the equity of each
Alphabet company, including Google."_

~~~
ahakki
Thank you for the correction. This is indeed the case.

Are the "Other Bets" still subsidiaries to Google or are they owned directly
by XXVI?

------
trapperkeeper74
Re-org: the universal sign of management theater or hiding the cash before the
cops come.

~~~
dmix
LLC's will hardly protect your cash from law enforcement action vs the
previous set up.

I believe it's just updating the business structure right down to the low
level corporate/legal structure to reflect their multiple silo'd "bets"
business strategy. It doesn't seem so nefarious if everything else is already
functioning that way in practice.

------
gesman
Google is clearly betting on non-search-engine enterprises for years to come

------
basicplus2
Great way to reduce liability

------
ocdtrekkie
> "Google is also changing from a corporation to a limited liability company,
> or LLC."

> "The change helps keep potential challenges in one business from spreading
> to another, according to Dana Hobart, a litigator with the Buchalter law
> firm in Los Angeles."

Effectively, I take it this means Google isn't responsible if a self-driving
car goes on a Skynet-esque murder spree, nor can their self-driving car
property be sold off by the government to pay all of Google's antitrust fines
coming down the pipe?

~~~
Itaxpica
Nope. The "liability" in the name refers to personal liability, and it's
'limited' in relation to the greater personal liability present in a
partnership or sole proprietorship. An LLC's liability structure is exactly
the same as that of a corporation; the main differences between the two are
how taxation is handled

~~~
ocdtrekkie
I am confused because that's what the article seems to say. The other segment
on this is:

> “By separating them, it allows the parent company to limit the exposure of
> the various obligations of the LLCs,” Hobart said. “For example, if one of
> the LLCs has its own debt, only that LLC will end up being responsible for
> payment of that debt.”

Is it that the act of making them separate companies under a holding company
that grants them this, rather than the change to an LLC specifically?

------
pgnas
Funny, I was betting on the new name to be "SkyNet".

------
martin1975
Since the latest censorship debacle, I have begun to resent Google on
principle. They certainly had everyone fooled with their "Don't be evil"
theme. No such thing.

What is needed now is an update to our laws that will prohibit carriers/hosts
of information from censoring content that does not violate the First
Amendment, the way GAB is doing it. GAB's efforts are worthy of an applause,
however, they are a lone wolf, a reaction to the usurpers at Google, Twitter,
Facebook, Apple, etc.

Speaking in disagreement with whomever on the internet isn't the same as
speaking in disagreement in someone's house where you can most certainly kick
the person out, or speaking in disagreement with your employer, James Damore
style and getting fired for upsetting the groupthink.

The wireless spectrum should be sold with these guarantees of freedom of
speech attached and new laws needs to be passed that will NEVER again allow
Google, Facebook, Twitter, Apple or whomever, regardless of size, to usurp
America's most precious freedom.

~~~
thrownblown
GAB = google/alphabet

~~~
joshuamorton
Gab is a free speech/alt right twitter clone.

~~~
thrownblown
exactly

