Alphabet's CFO Wants a Focus For the Company

[engine]

Nice quote from ex-Googler. Sour grapes, or what. This article is primarily about Alphabet, and makes interesting reading over it's "bets."

“No one wants to face the reality that this is an advertising company with a bunch of hobbies.” Alphabet's CFO Wants a Focus For the Company [bloomberg.com]

[toidi]

The best takeaway for all of us is that google is an advertising company and not an algo or any of the other faces they put out there. When viewed as an advertising company, the oddities of the algo start to make sense.

[keyplyr]

I see their ads as a small part of what Alphabet does. If you're only looking at internet & search, then yes the ads seem to be a driving force.

But don't forget aboult all the other enterprises Alphabet is: Maps, Navigation, VOiP, Google Home, Android, Plex Smartphones, Chrome OS, Chrome Browser, Chrome Stream Dongle, Google Fiber, Google Play Movies & Music, Google Apps, Gmail, Google Plus, Google Local Business, Google Wearables... I don't see these as hobbies.

It's always been Google's MO to throw R&D money at inivasion to see where it goes. Some don't go anywhere, some do. Seems to work IMO.

[robzilla]

I guess I have an advertising company with a bunch of hobbies, too.

Sour grapes, indeed.

[samwest]

Wow, if I had a hobby that made 22billion per quarter I wouldn't be worrying about "focus". Maybe they could consider being more of a steward of the web rather than trying to monetize each and every click. It's one thing to make money, it's quite another when you wipe out millions of small businesses. Their double standards infuriate, particularly when they ding a site for having affiliate links while the top of each search page is plastered with "Shop for [seach term] on Google" affiliate ads.

[Robert Charlton]

Related to this topic... here's an article I chanced to see today... not a probing piece of journalism, but a good overview of Google and some of its peers at the moment... Amazon, Google, Tesla, and to a degree Facebook... suggesting that there's a common business strategy among them, of pursuing what are called "Edge Strategies"....

AI, robotics, deep learning, automated delivery... how Amazon, Google, Tesla, and startups use these Edge Strategies to punish slower rivals
December 7, 2016
[linkedin.com...]

About the CEOs of these companies....

All are entrepreneurs. All remain disruptive. All are Edge Strategists.

Each operates a core business that has "about-faced" an entire industry ... or two. Each continues to invent at the Edge, ignoring old-fashioned industry boundaries. The "former Google, Inc." operates 11 core subsidiaries: Deep Mind, Access, GoogleX, Jigsaw, Calico, Google, G Ventures, Google Capital, Self-Driving Car Projects, Sidewalk Labs, Nest, Google, Verily. Entities like Youtube live beneath Google itself, two layers down. Google invests in and acquires startups -- like Deep Mind and YouTube -- to build this ecosystem.

AI, robotics, renewable energy, are the major themes, though how they might fit within the organization of a company at a given time might change... As keyplyr suggests, there are a bunch of smaller Google ventures that are pieces of this bigger list. I personally think that Google would much rather not be primarily an advertising company, but for now it's a necessity. I'm guessing they'd much rather have micropayments and a subscription model handling all access.

The diagrams of the internal Google, Amazon, and Tesla companies in the LinkedIn article add some mass to the enterprises, though they really don't go very deeply into how many applications of new technologies these companies are exploring. Google here is probably the most diversified and the least well described.

I should note that, at the far end of the island I live on, there's a Google-owned wind energy company, Makani Power, which has a hangar and offices, and occasionally I see some beautiful hardware... space-age carbon-fiber wind kites/gliders... which looks pretty substantial to me... being prepared for testing. Alternative power is one of Google's big interests... and it was born out of internal needs (data stations use lots of electricity) and out of an enlightened world view that sustainibility is necessary if we are to survive. Makani is one small piece of this... I'm not even sure it's producing useful power yet... but Google has announced that by sometime in 2017, Google will run on entirely renewable energy. Particulary for such a large consumer of electricity, that to me is very impressive.

[robzilla]

it was born out of internal needs (data stations use lots of electricity) and out of an enlightened world view that sustainibility is necessary if we are to survive

The two often go hand in hand, and I don't think it's entirely fair to say they're not being "stewards of the web", as samwest wrote above. In fact, I don't think there's a tech company out there that's done more for the web at large than Google has, but personal grievances may have to be pushed aside to appreciate them.

[ergophobe]

Google has announced that by sometime in 2017, Google will run on entirely renewable energy. Particulary for such a large consumer of electricity, that to me is very impressive.

This is fantastic, but it's mostly a financial decision, not a technological breakthrough by Google. But I applaud them for making that financial decision.

I run on 100% renewable right now and so can any PG&E residential customer and most people who are in the Bay Area in a CCA area (Alameda County has one coming in 2017; Marin has one already that services most of Contra Costa County already too). It cost just a small extra amount each month (in my case, adds about 15% to my bill).

This is grid-sourced solar, which means that you are actually buying additional renewable capacity equivalent to your overall usage. In other words, at night, I'm running off whatever non-renewable source is available. During the day, the additional solar capacity I'm paying for is more than I need, so is sold to others. So *net* I'm 100% renewable, but at any given moment, I'm not.

This is what Google is doing in 2017.

Don't get me wrong. Hats off to Google. This does add expense and it does increase baseline capacity. It is perhaps the most important thing they can do as a company in the short term (as consumers we have some additional high-impact choices).

So that's how such a large company is able to pull this off. We're probably several years away from having storage tech that allows us to run off renewables all night long.

[Robert Charlton]

This is fantastic, but it's mostly a financial decision, not a technological breakthrough by Google. But I applaud them for making that financial decision.

ergophobe, thanks for catching this, and for your clear explanation of a subject that's potentially tricky to get across succinctly. Yes, you are right, and yours is a many-faceted summary that explains what and why Google is doing from several angles.

I'd gotten the story from this Guardian article, so I knew the background and was familiar too with many of the principles of energy trading from other sources. Somewhere in the back of my mind, though, at the hour I posted, I was aware that I was cutting corners in on the details, so thanks for jumping in....

Google to be powered 100% by renewable energy from 2017
[theguardian.com...]

In the context of my post, as it turns out, I was in fact amplifying Google's technical accomplishments to a degree, I suppose because I've been aware of the company's dedication to energy conservation... but I was also not giving them credit for their willingness to sacrifice short term profits because they believed that a clean power infrastructure was necessary enough to encourage and subsidize... something which is also a measure of dedication.

That said, Google couldn't possibly be in a position to be paying such a premium on their clean energy gap needed to be bridged to reach 100% if they had not already made serious technical and infrastructure advances themselves in an Edge area like energy, to reduce that gap. That is, in part, the topic of this discussion.

Alternative energy development, if I remember correctly, was one of Google's earliest side ventures, going way back to the early days of Eric Schmidt. I think they originally had their energy ventures as part of a non-profit foundation... then decided to pull it inside because they saw it could make money.

In the Wikipedia article on Schmidt [en.wikipedia.org...] there is a description of Google's advice to Washington in 2008, as a member of the President's Council of Advisors on Science and Technology...

Schmidt has proposed that the easiest way to solve all of the domestic problems of the United States at once is by a stimulus program that rewards renewable energy and, over time, attempts to replace fossil fuels with renewable energy.

Sounds like what Google as a corporation is doing now. The Schmidt family also has its own foundation, to address issues of sustainability.

I also agree with robzilla that there's probably not "a tech company out there that's done more for the web at large than Google has." To me, they were among the heroes in dealing with the Heartbleed bug, among many other things, and they continue to be a major force behind a fast and secure web.

[Robert Charlton]

P.S: Not to draw out the Google solar response more than is necessary, but it's difficult to get precise figures for how much of its own energy Google is currently generating. This, in a reference from the Guardian article cited above, is the best info I can find. The wording does get evasive....

Few companies directly generate significant amounts of their own power. One exception is Google, which is currently using renewables to provide 37% of its energy needs. Google uses a combination of purchasing green power near its data centers and investing in onsite renewable projects, including a 1.9-megawatt solar array at its main campus in California that meets as much as 30% of the site’s peak energy use.

[tangor]

Guys and Gals (yeah, not PC, but what is these days?):

You're not really buying into that "totally renewable" power thing are you? G, like other companies, are hedging bets against regulations OR excessive fines (EPA pollution) by deploying under used and non performing Green Energy and./or SUPPORTING it to OFFSET their UTTER RELIANCE on the power grid. That grid is maintained by nuclear or fossil fuel (geo-thermal in Iceland) which works when the sun don't shine, or turbines whine (in the wind)) .. and (well I was about to say anyone who doesn't know that is a fool but that would be rude).

What intrigues me more is the thread change from "focus" to green. G's focus should be those that came to the dance and danced with them to make them what they are. G has, in many instances, and niches, and the lowly webmaster, forgotten that in the growth of NUMBERS in the chase for the advertising buck.

Started with a grand "Don't Do Evil" bait and switch and here we are. We haven't changed that much but G surely has. :) (Think of all the barnyard animals if nothing else)

Focus would be core business (search, web which includes youse and meese) instead of everything else.

G after dark (when the sun don't shine) is gobbling up umpteen mW of power every day. Every Day and Night.

Focus should be keeping the ad biz clean and neat. We can hope. We might also have Porcine Aviators, too.

[engine]

Tangor, this article is primarily about Alphabet, not just Google.

Renewable energy has to be a way forward, however it's done, and it has to be investigated and developed. If there's no investment in renewable energy there won't be developments to increase efficiency. I doubt you're suggesting we ditch development in renewable energy.

Back to the topic. Alphabet has many projects under development, and, perhaps, these were "bets" where the CFO wants to help bring clarity and a focus to bring the best bets to fruition. I don't see there's anything wrong with that. After all, the only reason Alphabet can do what it does is thanks to the ad income from Google. All the eggs are in one basket, and the CFO is prudent, imho, to remind the chief executives that putting money on red five might be better than putting it on every number on the table.

[toidi]

After the google barge proved to be just a gimmick i started to see the other projects in the same light. Some are true attempts at innovation but all were done to keep google in the news as the best and most innovative provider of technology. It worked. Nobody noticed that the advertising company had chaged the algo from providing the best answers to providing the answers that were best for google. Brilliant !

[ergophobe]

You're not really buying into that "totally renewable" power thing are you? ... That grid is maintained by nuclear or fossil fuel

That's more or less what I was saying. What Alphabet is doing (and I'm doing) is buying a capacity equivalent to my total usage which is NOT the same (for me or Alphabet) as being 100% renewable all the time. This is a great step in the right direction and Alphabet's action will help move us toward a renewable energy system, but we are several years from having that kind of capacity and, above all, storage.

>>What intrigues me more is the thread change from "focus" to green

Merely trying to clarify something that was mentioned in a perhaps misleading way earlier in the thread. I don't think it's the biggest news, but it is significant and merely wanted it represented correctly.

[ergophobe]

Focus would be core business (search, web which includes youse and meese) instead of everything else.

I like the formulation at the outset - an advertising company with a lot of hobbies. They have been shedding some hobbies (Google Fiber). At the same time, I think a search engine that sells advertising is a weak platform for an empire. Far weaker than, for example, a widely used operating system.

Of all Alphabet products, the one that's easiest for me to quite is Google Search. Gmail is a lot harder. Google destroyed how many other search engines just by being significantly better (but compared to today's standards, not very good)? I think it's hard at this point for two smart guys to come up with a better search engine (and not get bought by Alphabet or Microsoft), but it could happen.

So they need to focus, but right now they generate so much cash and I don't think improving the search engine can suck up all those billions. So I see the moonshots, pared down to a reasonable number as the CFO wants, is a good way to hedge their huge bet.

[samwest]

Google goats, now there's a planet saver.