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Alphabet reporting structure nicely highlights what makes money, what doesn't. Will this increase pressure to trim the fat in playtime projects? On the other hand, signals that Google still hasn't quite found a way to expand outside its core biz.
Daniel - I like and use some of those too, but Google still has to find a way to expand its current methods to make money. Advertising is a finite source of revenue. They need to build a solid base in selling services or hardware (yay - hardware!), or face the likelihood of limiting out somewhere. Apple has it over Google in this respect - they are looking for real biz areas to expand. Google theoretically is also, but all their attempts look at lot like science experiments.
Also just read that Apple revenue was $233B last year, Google a mere $75B. The valuation hype is all over stock price which could just as easily reverse in a fickle market. Apple is still way ahead of Google in fundamentals.
It is staggering to think that 7 of their services (Android, Chrome, Gmail, Google Play Store, Maps, Search, YouTube) have 1B or more users.
I'm sure they've piled up a huge loss on the autonomous car R&D. There's Google Fiber, which should be making more money than it is. There is Project Tango to compete with Intel RealSense. There was even a note yesterday somewhere about a project to fly 5G solar powered drones. (Geotethered blimps out, solar-powered drones in - still a long ways off.)
Nest is also still in "Other Bets". To me, Thread is one of the biggest IoT developments coming.
Daniel - I like and use some of those too, but Google still has to find a way to expand its current methods to make money. Advertising is a finite source of revenue. They need to build a solid base in selling services or hardware (yay - hardware!), or face the likelihood of limiting out somewhere. Apple has it over Google in this respect - they are looking for real biz areas to expand. Google theoretically is also, but all their attempts look at lot like science experiments.
Also just read that Apple revenue was $233B last year, Google a mere $75B. The valuation hype is all over stock price which could just as easily reverse in a fickle market. Apple is still way ahead of Google in fundamentals.
Agreed, Google getting into the hardware or devices business could help, although they have to do it carefully because if they compete with their own Android customers too much then those customers will replace Android with their own OS.
Don: "...a huge loss on the autonomous car R&D" as far as I know, we can't speak about losses in R&D before the related product comes into production, or stay at project stage (in this case it's 100% loss). If the autonomous car ever comes into production (this is still to be seen, as between the demo project and the product launch there are probably thousands of security, safety, legal issues to solve) it may become profitable. Or not, like the Google glass.
Thread: I am wondering if we would debate about this product if Nest acquisition price would have been reasonable and not $3.2 billion? Is it such a sexy product?
At least, this high price can be seen as a very good marketing deal!
Eric - thanks for correcting that, the autonomous car is officially an R&D expense, not a loss from a reporting standpoint. I don't think it ever will be a gain (at least in this decade) but I'm in the minority on that.
Thread has a lot of implications beyond just Nest, and I agree, $3.2B is a lot of investment to recapture. Part of Google's acquisition strategy, like Android in the first place, seems to factor in keeping technology and patents out of someone else's hands. It's funny that Tony Fadell leapt out of the arms of Apple and later into the arms of Google. Patents everywhere have commanded large premiums lately.
