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So all google divisions are now individual companies inside a conglomerated called Alphabet where Larry is the CEO and Sergei the President. Sundar Pichai is now the new CEO of Google. Is that right? Why do you think they are moving this way? Regulations? Taxes? What about Eric Schmidt?

I don't know much about trading, but look at that "after hours" spike! http://postimg.org/image/ho5ecyr99/

EDIT: All google subsidiaries are now subsidiaries of a conglomerated called Alphabet. Google is a subsidiary too. Google stock will now be Alphabet stock.




I didn't read it that way. All of Google's subsidiaries are subsidiaries of Alphabet, as is Google. But divisions inside of Google (Android, Youtube, &c) remain Google.

The big news is that Larry and Sergey are stepping back into a more Warren and Charlie kind of role, and Sundar Pichai is taking over as CEO of Google.

My question is, what does "slimmed down" Google mean?


> My question is, what does "slimmed down" Google mean?

It means Google minus all the parts that are now their own direct subsidiaries of Alphabet.

Which, previously, were all part of Google. Hence, "slimmed down".


A lot of things they were getting in to like cars just didn't fit.

It's going to remove the 'is this a thing Google should be getting in to?' question when evaling ventures/acquisitions.


I wonder where platforms (the HW company inside of Google that builds all their machines and switches) ends up. If they make it their own 'letter' (H is for Hardware?) then they could potentially have it build data center hardware for other companies. That would be interesting.


Related to my response to another one of your comments, this would be a VERY Samsung move; I don't know if they'll do it, though. Depends if they see their infrastructure hardware more as a competitive advantage for their internet-services business or as a marketable product in itself.


Per the SEC 8-K, technical infrastructure falls into Google proper.


> My question is, what does "slimmed down" Google mean?

It looks like they're taking all the experimental research stuff out of Google and making them direct subsidiaries of Alphabet instead, particularly projects that aren't directly related to the Internet.

The article talked about Life Sciences and Calico, and I have to wonder if other stuff like the self-driving cars are going to become direct Alphabet subsidiaries as well (then again, maybe not: I assume the self-driving cars are tied closely to Google Maps).


Google X as a whole is going to become an Alphabet subsidiary; presumably if that takes off it will get spun off into its own Alphabet company.

A more focused company that's moving to the top level of this hierarchy is Nest.


I think in this case it just means the new slimmed-down Google won't include X, Calico, Wing, etc...


I think it just means the Google division will no longer contain the parts that have been spun off. There may be others but from the announcement that looks like: Life Sciences, Calico, Ventures and Capital, and X lab. Later on in the announcement they call Google "slightly slimmed down" which seems like a bit of an understatement.

Presumably they hope that something outside of the new google division will blow up and make the divisions a bit less lopsided.


Remember the "more wood behind fewer arrows"? That's slim Google. Alphabet is Larry & Sergey missing the more arrows.


> what does "slimmed down" Google mean?

Hopefully less likely to run afoul of antitrust regulation.


Less employees is how I interpret it. Lay-offs.

I have no reason to suspect this, that's just how I usually interpret wording like that.


Most certainly not the only reason why and possibly not even the most important, but the EU has started to load up on the anti monopoly against Google recently, with talks about breaking it up in Europe (similar to the Microsoft case in the US some years ago, although it didn't go through and in this case it would only split in EU).

http://www.theguardian.com/technology/2014/nov/27/european-p...

> The European parliament has approved a motion calling for tougher regulation of internet search, including suggesting breaking up Google as a solution to its dominance in Europe.

That certainly wasn't a done deal nor even agreed that's what the commission would really aim for, but the heat was mounting and Google's move cut them short just in case.


But isnt this consolidation instead of separation? Or are they creating this entity so that they will keep Google intact even if they are ordered to separate?


This makes it easier to spin off a Google EU corporation, owned by Alphabet, built specifically to manage the intricacies of EU law. Google EU would just be another subsidiary, that perhaps licenses its technology from Alphabet or Google US.


If you compare GE to Google, or Samsung to Google, then Google doesn't seem to have an absurdly diversified portfolio. But GE doesn't have a back-end that can facilitate easily realizing marketplace advantages in jet engines based on what they've done in light bulbs. Google can do exactly this. And the EU has taken notice. It would make sense that this is the primary underlying issue, even if the move is primarily proactive.


the level of constructive criticism here just blows me away. my god what an amazing community


My own guess: it allows upcoming management/leadership to exercise more independence in the various divisions of "Google". Further, People like titles, and it's hard to share them.


A very good point. Didn't look like Sundar Pichai was going to oust Larry Page as CEO anytime soon. This gives everyone the ability to continue their upward mobility (and responsibility), with increased independence from aligned (but separate) businesses within Goog--er, Alphabet.

IOW, Nest reports to Alphabet, and so does Google. Both are aligned, but separate.


I'd assume it was a move to make failure easier. Sclerosis is the natural fate of large corporations but variation and selection is an obvious way to help with that.


The danger of conglomerates that give so much freedom to their subsidiaries is that said subsidiaries start actually competing against each other and hurting the business overall.


Danger? You mean benefit? Companies not succeeding themselves even as they fall from relevance is a massive reason why large companies fail.

Look at Blackberry, they had an internal project working against the rest of the company (namely Android on Blackberry hardware) that could, had it been allowed, saved the company. Instead Blackberry are either going to be purchased OR go bankrupt.

Honestly internal competition is an argument for doing something like this, not against it.


Sony took internal competition too far in the 90s and created a situation where they developed severe internal NIH syndrome and wasted a whole lot of resources with different divisions re-implementing things. The system produced some of the most revolutionary and iconic consumer electronics ever before it went off the rails. The danger I was referring to was repeating Sony's mistakes.


My current blackberry device runs android apps. So the project seems to have been a somewhat of a success.

The company appears to still be alive and still has a few billion dollars in the bank despite now years of people saying that they're going bankrupt. I wish I was 'going bankrupt' like Blackberry.

Blackberry seems to have secured a solid niche position in mobile security, despite losing the majority of their mobile phone business to more end-consumer electronics driven companies (primarily samsung & apple).


And Nokia let the bigger, older Symbian division to keep the smaller Maemo/MeeGo division to ever reach any relevance.


> The danger of conglomerates that give so much freedom to their subsidiaries is that said subsidiaries start actually competing against each other and hurting the business overall.

Google seems to like competing against themselves, so I'm not sure that's something that they are particularly worried about.


Stack ranking is already this times 10.


The intent is faster speed, greater independence and run like leaner startup. Also, additional career paths for employees, especially for the senior folks aspiring to be CEO.


Historically conglomerates are not known for speed and lean structures. I am curious how they plan to pull that off.


True story. Rather than speed, I'd say independence is the goal. Warren & Charlie (BRK) have proven that this model works - purchase great companies, then let them continue to do their thing (albeit with more resources). All roads report up, but Dairy Queen doesn't wind up run by the same person as GEICO on the executive level.

So long as Sergey and Larry (& Co.) keep from micro-managing, I think this structure will be enormously beneficial. I can't see how someone running Google's web properties would be able to move quickly when also having a hands-on responsibility for developing a self-driving car and a glucose-sensing contact lens.


Why do you think they are moving this way?

It's a twist on "adult supervision". They have put an adult in charge of making money. Meanwhile, Larry and Sergey get to keep playing around with all sorts of exotic projects that may or may not eventually make money.


I hope Eric Schmidt won't manage Google Talk / Hangouts anymore. Then there will be a chance of fixing this mess back.

UPDATE: Hm. Judging by downvotes, some folks here liked the fact that he killed XMPP federation of Google Talk and didn't propose Hangouts as an alternative open protocol. What an achievement.




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