BRIN: "…the whole point is that Alphabet companies should have independence and develop their own brands."
Brin "We've been doing it wrong; now were going to fix it by getting them out of our hot tub". "They can hang on the deck though, watching us watch them with our cool Glass 2 that they had to give us to be invited to the party". "And Cheetos".
Apples iPhone was starting to take off and Google was a "bit" sharper then Balmer in recognizing that mobile was going to dominate, and with Gates being a major Apple shareholder they were vulnerable to having Google search locked out of both Windows and mobile.
They bought Android, made it open, and gave it away free. They needed it to proliferate rapidly. Its only goal was to ensure nobody could lock out Google search.
Android is integral to Google search.
Some of that makes no sense.
Gates was never a "major Apple shareholder". MS had to buy some AAPL stock as part of a settlement, but these shares were non-voting.
Windows is under competition watch in most major countries, locking Google search out was and is not even an option.
Android is not open, AOSP is. And AOSP implementations (like those in China) do not include Google Search or any other Google services, which quite clearly proves that they can't be that integral, if they are not even there.
This may not be such a dumb strategy. Look at the market reaction after hours. It can change incentives within the company quite dramatically, and people are more directly held accountable for their successes or failures.
As I have said before, given its size and increasing complexity, Apple may need to consider doing something similar soon: hardware + software + services. Or, hardware + ecosystem.
To me the market reaction means nothing. It reminds me of a few years ago when Doug Kass tweeted that he heard Apple was planning a stock split and the stock immediately jumped several percent. Investors think they're going to get more clarity but I'll be surprised if they get the granularity they want.
Apple is different in that it controls the whole widget and software + services are really there to drive hardware sales more than anything else. But I do think Apple needs a senior exec reporting to Cook just for cloud services. If you look at Eddy Cue's role it's basically anything that doesn't neatly fit into software, hardware or design. Its a hodgepodge of stuff. I would take the backend cloud stuff and move it under a new SVP or VP reporting directly to Cook and let Eddy handle the customer facing stuff.
Astonished about the many remarks thinking Apple could have any interest in own search. I don't see it. The only way to capitalize on search is targeted ads, ideally including the give-away of detailed (not necessarily identifiable) user information. This does not line up with Apple's interests at all. And it does not line up with their M&A activity. They have not bought a single company they rely on for POI data, only companies working on very specific things. They want to eliminate search (taking that step out of the UX), the OS will give you the right source depending on what the question is, not own it.
It seems to prove that Google's management is much smarter than Apple's management. Apple has poured tens of billions of dollars into share repurchases and all it has done is driven Apple's share price into the toilet and lost the company $120 billion in market cap. Everything that Apple does only makes the share price go lower. Google does a simple company restructure and assigns new CEOs and a president and the share price shoots up 6% and $20 billion in market cap overnight. Why is it that Apple can't figure out how to do anything to increase the value of the company when other companies can do it so easily. Google's $20 billion gain in market cap is like free cash. It's not as if it increased revenue or profits. The only cost was the cost of restructuring the company which might have cost a couple of million dollars tops. On the other hand, Apple is spending money to lose money and that doesn't help shareholders at all. You watch Google's P/E go up to around 50 while Apple's P/E drops even further down. Eventually, Google's market cap will exceed Apple's market cap while only taking in a fraction of Apple's revenue and profits. Google is playing to win value while Apple is playing to lose value. That's a real bitch-slap to Apple shareholders.
To me the market reaction means nothing. It reminds me of a few years ago when Doug Kass tweeted that he heard Apple was planning a stock split and the stock immediately jumped several percent. Investors think they're going to get more clarity but I'll be surprised if they get the granularity they want.
The main problem investors had with Google (since quite some time and growing) is that they are still a one trick pony, and that what they waste their profits on is totally opaque. Today's strategic move includes the hidden promise that they plan on having additional profit-creating businesses. This is, for now, an empty promise, but it buys them time (e.g. shuts down activist investors, or at least makes it harder for them to stir up whatever). If anything, they have created themselves a problem down the line, because now they have to deliver, and I do not see that happening at all.
Apple is successful for many reasons - one of them is they are NOT sliced up into separate entities. All oars row the boat...They are remarkably agile and responsive for such a massive company, because of this.
If something doesn't work, any or all divisions have an active responsibility to fix the issue and right any wrongs. In a walled garden, it is much harder to accomplish things because there are separate motivations.
The key is having a focused business model, with strong overlap and reliance between product service efforts. Apple has that in spades.
Of course the key is a "focused business model." That's a platitude. I can assure you that Warren Buffett runs Berkshire Hathaway -- which is a ridiculously sprawling entity compared to Apple that has everything from Dairy Queen to Insurance to Railroads -- with a focused business model.
There's no reason why "all oars" can't row "the same boat," or be "remarkably agile or responsive" or "have an active responsibility to fix the issue and right any wrongs," or why it should be "a walled garden" (wow, that's a lot of cliches).
When you get to be a certain size, with so many products and services -- computers, phones tablets, music players, watches, set-top box, books, music, movies, TV shows, productivity suites, photo/movie/music authoring/book authoring, and a vast array of networking/networked products (iCloud, AppleMusic, email, browser, search) -- and you're getting into health, education, cars, etc. etc. (I am sure I am missing quite few things!) things do start to get awfully complicated. There's only so much bandwidth that one CEO and his/her few lieutenants can muster.
We'll see how this all plays out. By 2020, I am predicting that Apple will be at least two -- quite possibly three -- very focused companies "rowing the same boat". It's inevitable.
This may not be such a dumb strategy. Look at the market reaction after hours. It can change incentives within the company quite dramatically, and people are more directly held accountable for their successes or failures.
As I have said before, given its size and increasing complexity, Apple may need to consider doing something similar soon: hardware + software + services. Or, hardware + ecosystem.
I have to laugh though that Page talks about focus when this seems like anything but that. .
I would disagree. IMO it should make the individual companies much more focused. Now their leadership can concentrate solely on their own businesses, succeed or fail on their own merits. The chances of the various companies being successful enterprises in their own right just went up with the new accountability and opportunities for recognition (and compensation!). I think it will be seen as a brilliant move, thus the excitement from investors.
If there's one thing that has characterized Google it is the ADHA focus of the management for the last 20 years. Why should that change now? The next "shiney" to come along and it's off to the races... I can understand why this restructuring is happening: Google's patent on search is about to expire and one of these other entities are to pick up the profit slack that's going to befall Google. However, I don't see any of the wild-assed ideas that's the mainstay of the other business units replacing the search income... Google may be a three-ring circus with too many clowns, but it's still a one-trick pony show...
Yes, because eventually having falling revenues and profits and no prospect will be a win for Google and shareholders, absolutely... Maybe they should put their names on buildings, it has worked for Trump after all...
BRIN: "…the whole point is that Alphabet companies should have independence and develop their own brands."
Brin "We've been doing it wrong; now were going to fix it by getting them out of our hot tub". "They can hang on the deck though, watching us watch them with our cool Glass 2 that they had to give us to be invited to the party". "And Cheetos".
When you get to be a certain size, with so many products and services -- computers, phones tablets, music players, watches, set-top box, books, music, movies, TV shows, productivity suites, photo/movie/music authoring/book authoring, and a vast array of networking/networked products (iCloud, AppleMusic, email, browser, search) -- and you're getting into health, education, cars, etc. etc. (I am sure I am missing quite few things!) things do start to get awfully complicated. There's only so much bandwidth that one CEO and his/her few lieutenants can muster.
In most corporation, the way they are structured, I'd agree with you. However, Apple's structure is unique and deliberately different. It is lean at the top; more so than must corporations. Even the number of Board of Directors is lean. You list a lot of products and services Apple is involved in, yet Apple see a few products and everything else is to support those products (the ecosystem). This allows a few top visionaries to direct the show as it relates to everything working together so the sum of the parts make a better whole.
Google, on the other hand has these completely unrelated products. One division is making home thermostats while another division is making robotic jackasses for the military. This begs for a whole different management structure. If you can't see this, then I have a barge or two to sell you.
Gates was never a "major Apple shareholder". MS had to buy some AAPL stock as part of a settlement, but these shares were non-voting.
Windows is under competition watch in most major countries, locking Google search out was and is not even an option.
Android is not open, AOSP is. And AOSP implementations (like those in China) do not include Google Search or any other Google services, which quite clearly proves that they can't be that integral, if they are not even there.
They're integral outside China; building your own services, plus a decent Google play replacement on top is massively costly and only Amazon has done it.
In China with Google out, it left a big wide gap for others to build something on top of AOSP without Google's existing service making this investment possibly a losing proposition.
In most corporation, the way they are structured, I'd agree with you. However, Apple's structure is unique and deliberately different. It is lean at the top; more so than must corporations. Even the number of Board of Directors is lean. You list a lot of products and services Apple is involved in, yet Apple see a few products and everything else is to support those products (the ecosystem). This allows a few top visionaries to direct the show as it relates to everything working together so the sum of the parts make a better whole.
Google, on the other hand has these completely unrelated products. One division is making home thermostats while another division is making robotic jackasses for the military. This begs for a whole different management structure. If you can't see this, then I have a barge or two to sell you.
Yes, Google needs a structure more akin to Samsung, a traditional conglomerate. This would be a disaster for Apple where every single product integrates with the next.
Astonished about the many remarks thinking Apple could have any interest in own search. I don't see it. The only way to capitalize on search is targeted ads, ideally including the give-away of detailed (not necessarily identifiable) user information. This does not line up with Apple's interests at all. And it does not line up with their M&A activity. They have not bought a single company they rely on for POI data, only companies working on very specific things. They want to eliminate search (taking that step out of the UX), the OS will give you the right source depending on what the question is, not own it.
Or Apple could just return a response to the search, using search merely as a convenience to the user (with higher privacy) and thus add to the ecosystem. Extending the backend for Siri and extending spotlight could eventually destroy Google slowly but surely. Apple doesn't need to make money from searches, that's the whole point and Google's achile's heel. Advertisers will pester about that but, so what. People that want to get ads from a specific company will opt in and that's that.
IMO this move is to hide Google's inability to grow their Search/Advertising business.
Bottom line is Google still gets the bulk of its advertising revenue from desktop search. And desktop search is constantly shrinking each year. Google is failing in mobile search. They only get about $3 billion in Android search. Facebook will surpass that number this year.
Google makes another $10 billion on iOS search/adverstising. But that money train could stop anytime now if Apple decides to remove Google as the default search. So what are you left with? A company that makes 90% of its revenue from search yet is losing desktop search revenue because of the move to mobile and losing mobile because of the move away from iOS. Google is a few quarters away from flat or negative earnings growth. They can't cook the books anymore.
So they split the books.
By having 7 companies they can show that 6 of their 7 companies are growing revenue at a fast rate. They can show Nest, Fiber, ect all showing nice revenue growth and can set pie in the sky expectations.
But the truth is those other companies make miniture revenue compared to advertising. And even if they grow 100% a year it will not offset the shrinking advertising revenue.
Totally agree, except it may not take Apple to change default search engines. Apple is empowering Spotlight to do much of a user's searching without invoking any search engine.
Depends on whose focus is being discussed, I guess. Page and Brin become the "overlords" of all of these diverse companies, but how many of them are making a profit? Most of them aren't. Where are they getting their funding? From the currently profitable Google.
None of those companies make profits.
Nest - none.
Fiber - none.
GoogleX - none
Google ventures - none
Calco - none
Car - none
It might simply be a plan to sell of these profitless companies to VC firms.
I've been of a mind that Google is desperately looking for another income stream to replace the faltering search income. And the clock is ticking down the days remaining on their search patent. It just seems Google has made a series of really stupid investments, as your above list aptly shows. Where Apple's investments are designed to add value to its products or the ecosystem of its products, Google's investments feel more like a scatter shot... hoping to hit something by accident than anything else.
It seems to prove that Google's management is much smarter than Apple's management. Apple has poured tens of billions of dollars into share repurchases and all it has done is driven Apple's share price into the toilet and lost the company $120 billion in market cap. Everything that Apple does only makes the share price go lower. Google does a simple company restructure and assigns new CEOs and a president and the share price shoots up 6% and $20 billion in market cap overnight. Why is it that Apple can't figure out how to do anything to increase the value of the company when other companies can do it so easily. Google's $20 billion gain in market cap is like free cash. It's not as if it increased revenue or profits. The only cost was the cost of restructuring the company which might have cost a couple of million dollars tops. On the other hand, Apple is spending money to lose money and that doesn't help shareholders at all. You watch Google's P/E go up to around 50 while Apple's P/E drops even further down. Eventually, Google's market cap will exceed Apple's market cap while only taking in a fraction of Apple's revenue and profits. Google is playing to win value while Apple is playing to lose value. That's a real bitch-slap to Apple shareholders.
Google's just playing market games. It's not real business and never sustainable. Meanwhile, Apple is furiously buying back shares because their stock is so low. They are making a killing on their own stock and adding real value to their shareholders and getting closer and closer to going private. Sure it's a stock game like Google but it's a long term play like everything Apple does. Google's aftermarket jump will make a few people a lot of money and then settle back down to where it was.
Comments
BRIN: "…the whole point is that Alphabet companies should have independence and develop their own brands."
Brin "We've been doing it wrong; now were going to fix it by getting them out of our hot tub". "They can hang on the deck though, watching us watch them with our cool Glass 2 that they had to give us to be invited to the party". "And Cheetos".
Apples iPhone was starting to take off and Google was a "bit" sharper then Balmer in recognizing that mobile was going to dominate, and with Gates being a major Apple shareholder they were vulnerable to having Google search locked out of both Windows and mobile.
They bought Android, made it open, and gave it away free. They needed it to proliferate rapidly. Its only goal was to ensure nobody could lock out Google search.
Android is integral to Google search.
Some of that makes no sense.
Gates was never a "major Apple shareholder". MS had to buy some AAPL stock as part of a settlement, but these shares were non-voting.
Windows is under competition watch in most major countries, locking Google search out was and is not even an option.
Android is not open, AOSP is. And AOSP implementations (like those in China) do not include Google Search or any other Google services, which quite clearly proves that they can't be that integral, if they are not even there.
To me the market reaction means nothing. It reminds me of a few years ago when Doug Kass tweeted that he heard Apple was planning a stock split and the stock immediately jumped several percent. Investors think they're going to get more clarity but I'll be surprised if they get the granularity they want.
Apple is different in that it controls the whole widget and software + services are really there to drive hardware sales more than anything else. But I do think Apple needs a senior exec reporting to Cook just for cloud services. If you look at Eddy Cue's role it's basically anything that doesn't neatly fit into software, hardware or design. Its a hodgepodge of stuff. I would take the backend cloud stuff and move it under a new SVP or VP reporting directly to Cook and let Eddy handle the customer facing stuff.
Astonished about the many remarks thinking Apple could have any interest in own search. I don't see it. The only way to capitalize on search is targeted ads, ideally including the give-away of detailed (not necessarily identifiable) user information. This does not line up with Apple's interests at all. And it does not line up with their M&A activity. They have not bought a single company they rely on for POI data, only companies working on very specific things. They want to eliminate search (taking that step out of the UX), the OS will give you the right source depending on what the question is, not own it.
It seems to prove that Google's management is much smarter than Apple's management. Apple has poured tens of billions of dollars into share repurchases and all it has done is driven Apple's share price into the toilet and lost the company $120 billion in market cap. Everything that Apple does only makes the share price go lower. Google does a simple company restructure and assigns new CEOs and a president and the share price shoots up 6% and $20 billion in market cap overnight. Why is it that Apple can't figure out how to do anything to increase the value of the company when other companies can do it so easily. Google's $20 billion gain in market cap is like free cash. It's not as if it increased revenue or profits. The only cost was the cost of restructuring the company which might have cost a couple of million dollars tops. On the other hand, Apple is spending money to lose money and that doesn't help shareholders at all. You watch Google's P/E go up to around 50 while Apple's P/E drops even further down. Eventually, Google's market cap will exceed Apple's market cap while only taking in a fraction of Apple's revenue and profits. Google is playing to win value while Apple is playing to lose value. That's a real bitch-slap to Apple shareholders.
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To me the market reaction means nothing. It reminds me of a few years ago when Doug Kass tweeted that he heard Apple was planning a stock split and the stock immediately jumped several percent. Investors think they're going to get more clarity but I'll be surprised if they get the granularity they want.
The main problem investors had with Google (since quite some time and growing) is that they are still a one trick pony, and that what they waste their profits on is totally opaque. Today's strategic move includes the hidden promise that they plan on having additional profit-creating businesses. This is, for now, an empty promise, but it buys them time (e.g. shuts down activist investors, or at least makes it harder for them to stir up whatever). If anything, they have created themselves a problem down the line, because now they have to deliver, and I do not see that happening at all.
Apple is successful for many reasons - one of them is they are NOT sliced up into separate entities. All oars row the boat...They are remarkably agile and responsive for such a massive company, because of this.
If something doesn't work, any or all divisions have an active responsibility to fix the issue and right any wrongs. In a walled garden, it is much harder to accomplish things because there are separate motivations.
The key is having a focused business model, with strong overlap and reliance between product service efforts. Apple has that in spades.
Of course the key is a "focused business model." That's a platitude. I can assure you that Warren Buffett runs Berkshire Hathaway -- which is a ridiculously sprawling entity compared to Apple that has everything from Dairy Queen to Insurance to Railroads -- with a focused business model.
There's no reason why "all oars" can't row "the same boat," or be "remarkably agile or responsive" or "have an active responsibility to fix the issue and right any wrongs," or why it should be "a walled garden" (wow, that's a lot of cliches).
When you get to be a certain size, with so many products and services -- computers, phones tablets, music players, watches, set-top box, books, music, movies, TV shows, productivity suites, photo/movie/music authoring/book authoring, and a vast array of networking/networked products (iCloud, AppleMusic, email, browser, search) -- and you're getting into health, education, cars, etc. etc. (I am sure I am missing quite few things!) things do start to get awfully complicated. There's only so much bandwidth that one CEO and his/her few lieutenants can muster.
We'll see how this all plays out. By 2020, I am predicting that Apple will be at least two -- quite possibly three -- very focused companies "rowing the same boat". It's inevitable.
This may not be such a dumb strategy. Look at the market reaction after hours. It can change incentives within the company quite dramatically, and people are more directly held accountable for their successes or failures.
As I have said before, given its size and increasing complexity, Apple may need to consider doing something similar soon: hardware + software + services. Or, hardware + ecosystem.
i thought that was what ibm was for? jokes jokes
If there's one thing that has characterized Google it is the ADHA focus of the management for the last 20 years. Why should that change now? The next "shiney" to come along and it's off to the races... I can understand why this restructuring is happening: Google's patent on search is about to expire and one of these other entities are to pick up the profit slack that's going to befall Google. However, I don't see any of the wild-assed ideas that's the mainstay of the other business units replacing the search income... Google may be a three-ring circus with too many clowns, but it's still a one-trick pony show...
Yes, because eventually having falling revenues and profits and no prospect will be a win for Google and shareholders, absolutely... Maybe they should put their names on buildings, it has worked for Trump after all...
LOL! Someone understands.
Well, they can keep a secret better than Apple.
In most corporation, the way they are structured, I'd agree with you. However, Apple's structure is unique and deliberately different. It is lean at the top; more so than must corporations. Even the number of Board of Directors is lean. You list a lot of products and services Apple is involved in, yet Apple see a few products and everything else is to support those products (the ecosystem). This allows a few top visionaries to direct the show as it relates to everything working together so the sum of the parts make a better whole.
Google, on the other hand has these completely unrelated products. One division is making home thermostats while another division is making robotic jackasses for the military. This begs for a whole different management structure. If you can't see this, then I have a barge or two to sell you.
Some of that makes no sense.
Gates was never a "major Apple shareholder". MS had to buy some AAPL stock as part of a settlement, but these shares were non-voting.
Windows is under competition watch in most major countries, locking Google search out was and is not even an option.
Android is not open, AOSP is. And AOSP implementations (like those in China) do not include Google Search or any other Google services, which quite clearly proves that they can't be that integral, if they are not even there.
They're integral outside China; building your own services, plus a decent Google play replacement on top is massively costly and only Amazon has done it.
In China with Google out, it left a big wide gap for others to build something on top of AOSP without Google's existing service making this investment possibly a losing proposition.
In most corporation, the way they are structured, I'd agree with you. However, Apple's structure is unique and deliberately different. It is lean at the top; more so than must corporations. Even the number of Board of Directors is lean. You list a lot of products and services Apple is involved in, yet Apple see a few products and everything else is to support those products (the ecosystem). This allows a few top visionaries to direct the show as it relates to everything working together so the sum of the parts make a better whole.
Google, on the other hand has these completely unrelated products. One division is making home thermostats while another division is making robotic jackasses for the military. This begs for a whole different management structure. If you can't see this, then I have a barge or two to sell you.
Yes, Google needs a structure more akin to Samsung, a traditional conglomerate. This would be a disaster for Apple where every single product integrates with the next.
Astonished about the many remarks thinking Apple could have any interest in own search. I don't see it. The only way to capitalize on search is targeted ads, ideally including the give-away of detailed (not necessarily identifiable) user information. This does not line up with Apple's interests at all. And it does not line up with their M&A activity. They have not bought a single company they rely on for POI data, only companies working on very specific things. They want to eliminate search (taking that step out of the UX), the OS will give you the right source depending on what the question is, not own it.
Or Apple could just return a response to the search, using search merely as a convenience to the user (with higher privacy) and thus add to the ecosystem. Extending the backend for Siri and extending spotlight could eventually destroy Google slowly but surely. Apple doesn't need to make money from searches, that's the whole point and Google's achile's heel. Advertisers will pester about that but, so what. People that want to get ads from a specific company will opt in and that's that.
I had that exact revelation not too long ago.
It is? That would be a sad day.
Speaks volumes.
Totally agree, except it may not take Apple to change default search engines. Apple is empowering Spotlight to do much of a user's searching without invoking any search engine.
I've been of a mind that Google is desperately looking for another income stream to replace the faltering search income. And the clock is ticking down the days remaining on their search patent. It just seems Google has made a series of really stupid investments, as your above list aptly shows. Where Apple's investments are designed to add value to its products or the ecosystem of its products, Google's investments feel more like a scatter shot... hoping to hit something by accident than anything else.
It's a desperate attempt to make it more difficult for the growing number of plaintiffs bs Google to actually get anything accomplished.
Their stock should be selling off.
Never has any business in history enjoyed so much free money and undeserved good press as Google.
They make money from search ads and...that's pretty much it.
Their various projects are all done at s 100% loss.
They may see the bottom falling out from under them.
Hence the restructure.