Hacker News new | past | comments | ask | show | jobs | submit login

It seems as though Google (Alphabet) is splitting its business divisions into:

1) Google - a company comprised of reliably profitable products that run at massive scale (search, video, mobile, mail etc), and they know that Sundar Pichai can manage this

2) Everything else - these are high risk ventures with possibly enormous pay-offs. This is a breeding ground for positive black swans which Google are keen to expose themselves too.

To borrow Nassim Taleb's nomenclature, Google is splitting into mediocristan (1) (bounded variance - existing products [like YouTube] are predictably profitable) and extremistan (2) (Calico - if a major breakthrough in combating aging related diseases is made it will be both unpredictable and hugely materially beneficial)

>> We will rigorously handle capital allocation and work to make sure each business is executing well.

This sounds like the business restructuring will allow Sergey and Larry to apply just as much capital as they see fit to the extremistani business divisions. In other words they would like to control their exposure to possible consequential rare events in a simple fashion: by controlling a very simple set of parameters - i.e. how much cash each business division gets.




Applications are open for YC Summer 2019

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: