Ever since Sundar, a McKinsey guy, took over, the writing was on the wall for all of the bets that Sergey and Larry engaged in. He just cares about the bottom line (as some would argue he should), and doesn't have a "passion" per se. He's more than happy to just keep the train rolling, and keep the perception of growth up by showing more ads and using dark patterns[1] to make users click on what they think are web links but are actually ads. Eventually the train will run out of steam, and then its on to the next gig.
As a serial entrepreneur now Google employee, I think the bets have received too much funding. They seem like long term government research projects not scrappy startups trying to scale. Putting more rationality and business expectations is a good thing to determine the viability of some of the ideas.
I'm sure this is true by the standard MBA tooling. But if everybody is using those tools, it leaves opportunities for people thinking differently. Amazon, for example, has been hoisting a giant middle finger to MBA dogma for years with their overinvestment, and Bezos seems to be doing fine by it.
Another way to think about it is that Google really should be doing long-term research, because only finding and monetizing a major breakthrough is going to make it so that they don't have all their eggs in one basket. A basket that will, like all baskets, eventually break.
A third way is that as long as Google is extracting monopoly rents, they should probably put some of that money into government-like things that could have broad societal benefit. Because if they keep trying to maximize quarterly profit, they'll burn up all the societal goodwill that insulates them from real regulation.
Google are doing a lot of long term research though. Huge investments in AI, search tech, big data, networking, the TPU stuff. Self driving cars. Contact lens screens. Head-mounted displays. Drones. The list goes on and on.
Makani was funded for 14 years! 14 years!! How many companies are willing to fund speculative research programmes in things unrelated to their core business for so many years? None, that I'm aware of.
Truth is Makani should have been shut down years ago. Government or corporate has nothing to do with it (that is, the same assessment would apply if it was funded by the government too). Their idea clearly wasn't competitive with the by now highly optimised wind turbine industry. It's not obvious why it ever was expected to be so.
You seem to be arguing with something I didn't say.
I definitely agree that Google should prune their portfolio using rigorous standards. I'm just saying that if one judges the whole effort by typical established-business standards, you're going to get typical results. Some things need more time to prove viability. Since Google a) will be around a long time, and b) is currently dependent on a single cash cow, they can (and should!) take long-term risks with long-term payoffs.
> It's not obvious why it ever was expected to be so.
This is a very bad way to look at long-term research. Or any novel venture, really. You want to be a pundit with a great track record on startups? Just say each one will fail. You'll be right 90% of the time with very little effort.
But it's even easier to wait until something fails and say, "It's not obvious why it was ever expected to work." Of course! If it were obvious that something was going to work, it wouldn't need to be done as a startup. And once it has actually failed, hindsight bias lets us paint it as an inevitable failure. E.g., if SpaceX had had less money and a couple more explosions, it could easily have gone under, and then all of its detractors could have done the "we told you it would never work" routine.
>Amazon, for example, has been hoisting a giant middle finger to MBA dogma for years with their overinvestment
This is not a great way to think of Amazon. Amazon is basically a VC that only funds internal "start-ups" and "unicorns." You still go to Bezos and the leadership team with a business plan, financial model, path to profitability, market fit, differentiation, competitors, TAM/TAM growth, and "is it a land grab?"
They do not fund "interesting ideas for the sake of interesting ideas" like the Google X projects. Even the most secretive Amazon projects tend to tie pretty closely to their existing businesses and strategies when they are revealed.
Also, not sure if this is still true, but Amazon was the #1 largest hirer of MBAs from top programs for a couple years.
As I explained elsewhere, Alphabet's moonshot investments are a different kind of investment than the what Amazon has been making for decades. But Amazon has been investing very heavily in changing the nature of buying stuff. To much grumbling from people who preferred profit.
15 years ago Bezos could have retired rich and turned it over to a standard CEO, who would have milked their then-excellent position commanding a large and growing share of ecommerce. And he would have been applauded by a lot of analysts, etc. But instead he's put titanic sums of money into making what are, at least on paper, pretty modest gains in terms of purchasing friction and latency. Is 2 days really that much better than 3-7 days? Is next-day and same-day really better still? The customers' answer is "fuck yes!" But it wasn't clear up front, at least to a lot of investors and commentators, that it was really worth tens of billions in capex.
In both cases, what I'm talking about here is investments that go beyond the time horizon of most companies. If you measure them by the average company (which has a much shorter exec and CEO tenure), of course they'll look bad.
Amazon is not a good example to cite for going against the MBA grain. No amount of convincing can get Amazon to fund a Makani style kite energy, or other X moonshots that Google funded.
As for ploughing investment to keep growing at the cost of profitability, that's every VCs formula and very well understood by the MBA crowd.
It's the worst example for this kind of investment, sure. But the common theme is that what your average exec sees as needless investment may just have a payoff outside the few-quarters-to-few-years range that they are using to score investments.
I'll note that the US had much higher economic growth during a period where large companies all were, by modern standards, overinvesting in R&D. It could be that we're just much smarter now. But it also could be that since CEO tenure has fallen nearly in half in the last 50 years, execs have stopped investing in things that they won't personally be around to profit from.
It's interesting that while these projects don't go forward, Google doesn't open-source the work they already did on them. It may not be viable for a business like Google to pursue such an operation, but it might be a viable solution for other entities that could benefit from it.
Sometimes the projects are "open sourced." For example, the findings of "Project Foghorn," which aimed to produce a synthetic fuel from seawater, were published in two academic papers, one explaining the economics and the other the chemistry. https://x.company/projects/foghorn/
Another, "Project Malta," which aims to store energy in molten salt, was spun out into an independent company. https://www.maltainc.com/our-story
This is a source of great frustration to me as someone who previously worked at Google X. So many promising projects thrown in the trash, when all of society would have benefitted if Google had open sourced their defunct projects. You know how some economists joked that you could stimulate the economy by paying people to dig holes and fill them back up again? Doing a bunch of development and then abandoning it seems just as wasteful to me. They trashed a lot of valuable off the shelf hardware that could have been donated to schools too. It’s all such a waste to me.
I tried. They were throwing away thousands of dollars worth of brushless motors. I asked in writing if I could donate them to schools and hobbyists. I was told no by a mid level manager. That rubbed me the wrong way, so I went to Astro Teller’s office hours. He said “this is our trash? We obviously don’t need it then.” He gave me tentative approval, and asked me to email him to check with legal. I did, and ultimately got approval from the head of intellectual property at X. I saved the motors from the trash, but apparently going to Astro was seen as “going over somebody’s head” so I pissed off upper management (the head of the team did not respond to my email and was on vacation while all this happened). So I parked the motors under my desk for a while while things calmed down, eventually got a few more approvals, and took the motors home. I’ve been donating them to hacker spaces and local robotics groups.
But the thing is, schools can’t use brushless motors by themselves. They need power supplies and motor controllers too. So when my team was throwing away fifty 600 watt power supplies, I wanted those too.
The whole time, I was not just asking for one item from the scrap bin, I was asking for an approval process. We threw away perhaps tens of thousands of dollars of valuable off the shelf parts a year. I couldn’t be talking to the head of X every time I needed approval. But management in my team didn’t care. Instead of responding to my request, they complained about my methods, saying I need to go through “proper channels”. I drafted a document describing a process for saving items from scrap that had documentation and oversight without requiring much bandwidth from the higher ups. It went nowhere.
So Google X still scraps thousands of dollars of stuff on the regular. Many people inside X want to help donate that stuff to schools. But the management on my team didn’t care one bit. I guess when you’re paid a million bucks a year, you just can’t relate to the local school kids who can’t afford motors for their robot. But I was once that kid, and to see these people dismiss what help we could give them was too much for me.
It’s still upsetting. Google X talks about changing the world and moonshots but you know what would change the world? Giving valuable supplies to local schools. I offered to do all the work on my own time, but they couldn’t be bothered to give me the time of day.
I understand your feelings about taking things that are waste for a corporation (R&D is a very wasteful process) and giving them to local schools.
As a contrast, the team I was on (Making and Science) purchased an enormous number of safety glasses, which we gave away at Maker Faire. We often gave whole boxes to teachers who asked (like, 144 glasses). You see them all over the place, and the teachers were always thrilled to get them.
But throwing away valuable stuff is still waste. If you can help someone a great deal for next to nothing, that’s worth doing. Forgoing that help and then making donations elsewhere is nice I guess, but it’s still wasteful.
also:
They are wasting resources with their side projects.
No one see the irony in that. I like their wacky projects. Obviously they to profit off of them at some point. But they are also kind of ground breaking if they actually turn out to work.
Alphabet also has the luxury problem of having discovered the most profitable business in the history of human kind. Now they struggle culturally to find something else to grow. They are user to basically make money for free and to so at insane scales.
Cloud is getting there but it‘s still nowhere near as easy. That‘s where Amazon in particular is very much in the advantage. They are already dominating the lowest margin business ever (online retail at scale). And they have a good foothold in cloud. Now they are getting into ads more and more. Much more comfortable direction to go.
In that sense the moonshots might make more business sense as well.
If Waymo works out globally. Add half a trillion to the valuation.
Wing: This could help them compete with Amazon.
GV/CapitalG: Very successful.
Sidewalk labs: could one day power cities.
Loon: not sure. Their better bet seems the heavy spacex investment with Starlink now. Though there are some pilots.
Verily: The health sector is fucked with leeches and inefficiencies. Especially entrenched players like epic who only want to protect their cozy position. Big opportunities there.
Calico: who knows. In a decade they could discover something insane. No idea.
Deepmind/brain: this is it. If only one project can succeed it should be this one in their view. If they succeed with AGI/ASI anything else doesn‘t matter. This is of course a big if and likely decades away.
The only thing they‘re currently not funding is fusion research. But that might be too long term even for them.
It is said that the laser printer in itself paid off multiple times for PARC (I think I read it said by Alan Kay)
But of course they could have own the personal computer space and the local network space too.
Companies as profitable as Google probably ought to be thinking of other companies/society rather than themselves. The idea that companies should optimise purely for profit is the worst part of capitalism.
Those were basic research, not 'we have a bunch of cool tech, let's glue it all together and go do crazy stuff'. If Google would pump money into materials science that would be Bell Labs, if they worked on next level interaction models that should count too, in that sense I think their general AI/ML work; speech recognition; synthesis and image classification work is more in line with what Bell & Xerox were all about than Makani, which is most re-using existing technology in ways that do not make much sense.
It's also possible that the idea is not competitive. The article is not quite clear. If it were the case, then it would be irresponsible to continue to finance what amounts to a rather exotic hobby.
You are free to believe whatever you want. But your competitors are meanwhile out there shipping 8 MW installations (and bigger ones are in test) and I really don't see how Makani will ever compete with that in a way that offsets all of its drawbacks. Flying the mass of the generators, tethers, complex launch and recovery system, power transmission over exposed cables, frequent maintenance, lightning sensitive, hard to keep mechanically safe in a storm, puny little rotors, what's not to like?
I sincerely doubt that. It fails the KISS test on a lot of fronts required for scaling. Scaling it up would require kites the size of 747's, the single points of failure (the tether and the hinge) would become exponentially heavier as the strength of the cable would need to increase. By the time those two lines cross you will need unobtanium to stay aloft. It's a neat idea but it is - with present day tech - not deployable at scale with the degree of reliability expected from windpower installations.
Keep in mind that the nacelle of a regular windmill is already quite a complex beast, it has one degree of freedom less and can adopt to gusty winds by simply changing its pitch, there is no need to bring the whole contraption back down to the ground before the wind fails to keep it aloft. The only way you can keep the Makani kite aloft if the wind drops rapidly is by controlled descent and that in turn you can do only about as long as your cables are. Typical generators for 'serious' windmills weigh on the order of 30-100 tons, that's roughly the take off weight of a 737-800 on the high end.
Props for actually building it though, that part - even at the limited scale of the prototypes - is quite an achievement.
Plan B could be large vertical shafts drilled into tall mountains. Let the high altitude winds create the venturi effect (low pressure) to suck air up the shaft and have turbines in the shaft to generate electric power. Similar to hydro power the construction costs are significant but after that it's almost trouble free energy.
The transmission to the shore is a 'minor' problem compared to transmitting the power from the kites to the base station. Also, every other off-shore power generation installation shares that same first problem, there are good solutions in place already (HVDC / offshore grid extension).
Astro Teller is quoted in the FT article as saying: “Our estimate of the rewards for the world, the reward to Alphabet, and the risks and costs to get there . . . they change over time. It’s part of my job to assess that and make sure that we’re picking the best ones we can for Alphabet to spend its money on.”
> Bezos is inspiring, maybe thats about it for me.
(Not an Amazon.com employee or ex-employee. I have no inside information.) I was excited to learn about the culture at Amazon.com but I'm personally very disappointed (perhaps because of the high bar I imagined). The story of buying a door and using as a desk probably gets repeated a lot but that and the touted base salary cap gets lost in the sky high executive compensation.
Salary.com https://archive.md/oIQ67 pegs both Jeffrey A. Wilke, CEO Worldwide Consumer and Andrew R. Jassy, CEO Amazon Web Services at over seventeen million dollars per year and Jeffrey M. Blackburn, SVP, Business Development at over ten million dollars per year. Even Jeff Bezos took in over a million and half dollars. I don't find it inspiring at all. I would find it inspiring if the leaders made closer to the salary cap (definitely under a million dollars a year).
Ballmer's salary was $260K IIRC. Many of his underlings made more than that. He's still an un-inspiring billionaire (and a very talented businessman, which few people give him credit for).
He helped make the Microsoft Surface line. At the time it had some trouble starting out but now Microsoft has a portfolio of Surface products that can actually go head to head with Apple products while Google's hardware strategy just keeps on being more and more confusing and weird.
Plus "Developers, developers, developers", right? Hilarious antics aside, doesn't he get some credit for pointing in that direction? FFWD a few years to VSC, Github, MS as arguably world's leading contrib to OSS... I came of professional age being pretty anti-M$ (and w good reason), but things do, sometimes, eventually, change.
"Developers, developers, developers" was in 2000, around the same time Ballmer was saying "Linux is not in the public domain. Linux is a cancer that attaches itself in an intellectual property sense to everything it touches. That's the way that the license works."[1]
The context of the "Developers, developers, developers" thing was that MS was fighting against open source to try to attract developers to the Windows platform instead.
Visual Studio Code, Github etc only came after Ballmer left.
Thanks @nl, quite right -- and I do recall, having been there -- but my point was not that Ballmer had all the right ideas(!), rather that his emphasis on developers led eventually to the org (under Satya) embracing OSS which IMHO represents a logical (tho far from inevitable) progression or evolution.
I agree, Steve Jobs is the most inspiring person to ever live. Not only did he take $1 as his salary, but he personally gave us revolutionary tech products.
/s
I like Apple and Steve Jobs, it's not the same without him but in the age where we are building the capacity to colonize another planet that far exceeds "one small step for man, and one giant leap for mankind", it's baffling to see people inspired by the frugality of one's personal income.
Some of the greatest achievements in the history of humankind are on the verge of happening and most people on HN can't see past their neighbor's pocketbook.
It seems like we're closer to a self inflicted mass extinction event than it does the miraculous innovation of galactic migration considering how drastically underfunded the efforts for the latter are compared to the former.
Or are we just hoping Bezos takes us all in his rocketships?
Maybe neither will happen and the few dollars we scraped from the each other's hearts will be our only comfort as humanity descends into an indifference about the natural world and world changing ideas. Maybe we will measure status in how much someone can accumulate for themselves and their tribe instead of the improvements they make for humanity.
And the $1 is clearly because his revenue stream was not his salary, which would be taxed in a different way than his capital gains on stock. It's as if a tax dodge is interpreted as altruism.
It doesn't mean anything. It's just the standard HN psychoanalysis combined with nerdrage against the MBA machine that's been par for the course since the 1990s.
There's no basis for this claim - well before Sundar, Makani and many other moonshot bets were spun out. Ruth Porat was brought in specifically to account for the wild-west type haphazard spending, resulting in the Google --> Alphabet restructuring.
Most of all, investors wanted clarity on spending, and Google reacted with the restructuring.
Let's take a moment to fairly summarize what's happened: extremely risky ideas that no sane investor would fund, received disproportionate funding, and as far as I can tell, they all failed even after a decade+ of not expecting profitability. There's no reason to pin this on Sundar - the ideas failed on merit
Also, speaking honestly, he's been rather generous with many projects (Chrome OS and related hardware, Stadia, even horribly performing pixel phone sales), despite decades of losing billions for Google.
That's how it happened, but it's also a display of tragic lack of creativity: the way to fund something like Makani is not to pretend that they would be rational bets. If they were rational everyone would be doing them. I think they could and should be "sold" to shareholders more honestly and sustainably as a brand maintenance efforts like the Oracle boats. On the slim chance that they end up turning a profit nonetheless nobody will complain. Perhaps the failure to put smaller projects like Makani on that track is a consequence of the old Google exceptionalism attitude.
(Smaller projects, because Waymo certainly wouldn't fit that framework.
But Waymo is sitting right at the ad business core: "ok car, take me to an Italian restaurant" would be 100% directory ad business)
Does anyone really expect Chrome OS to ever make a dent against Mac or windows in the PC market? Continuing to lose billions with no hope of moving the market is - generous.
At least Microsoft knew when to cut their losses with Windows phone
Instead of overfunding these they could have funded 100's of 'regular' start-ups and then play Darwin with the winners. That would have moved the needle a lot further than this.
This was true even when Larry was in charge. Google is not an energy company. It has no use whatsoever for weak sauce kite generators. Nor is it a car company, so expect Waymo to be spun off or sold in the foreseeable future. Nor is it a medical company or an ISP.
Prediction: all "other bets" not related to Ads, Search, and Cloud will be gone and forgotten within 5 years. Deepmind will probably remain, but will refocus on stuff that has more than just PR value.
Some may claim that. But there is little support for it besides the fact that they simply structured it that way for strategic purposes and possibly to try to de-emphasize their search dominance for the monopoly hawks.
The 'Google' portion of Alphabet is the only net income producer and almost the only revenue producer. All other Alphabet business are big time money losers right now.
That's the point Peter Thiel made to Eric Schmidt's face before Alphabet even existed.
Google doesn't want people/regulators to think they're a monopolistic search engine, so they build that phony shell company to host a bunch of nonsense sideshows to divert attention.
Google is not a conglomerate either. Yamaha, that's a conglomerate. Real products, from musical instruments to motorcycles, supported and a relatively strong brand in every market they operate in on merit.
[1] https://news.ycombinator.com/item?id=22107823