"Other Bets" includes everything under the Alphabet umbrella that is not Google, which means various entities that are supposed to be turning into individually profitable companies.
I thought the entire point of Alphabet was the "Other Bets" than Google.
So now the CEO of "Other Bets" is also the CEO of the main bet... so what's even the point of separating the companies other than the tax dodge? oh, right.
The article explains it, but it's not 100% clear why the extra step was needed.. "Google co-founder Larry Page announced Alphabet two years ago to foster new businesses that operate independently from Google. Technically, however, those units, called the “Other Bets,” were still subsidiaries of Google." With this new change, XXVI Holdings will hold the equity for all child companies, rather than Google still being the owner.
Until now the only Alphabet subsidiary was Google Inc. The other bets were still Google Inc subsidiaries. This move brings them up a level and separates them from Google.
It was a pun on "alpha"(the investment/speculation term)-"bets".
The original idea is that the Google founders would use Alphabet as holding company for their "alpha-bets", but apparently since Pichai took over of Alphabet as well this venture is probably also "Killed by Google"...
You could also consider Google as Alphabet's primary, or "alpha" bet, but Google is also investing in a variety of "other bets". The name also provides for cool URLs, like https://abc.xyz.
Alphabet never was “only Google” even on day 1. Google was long a conglomerate containing Google and “Other Bets”, other companies such as Nest etc before the alphabet shuffle.
Google was more or less just as much a holding company for a diverse range of other companies such as this Verily then as Alphabet is now, which is why the distinction between the two is considered so artificial by many here, an idea further compounded by the fact Google stock was converted to Alphabet stock and still uses Google’s ticker symbols.
Google is absolutely nothing like Berkshire Hathaway.
While people make the monopoly/conglomerate/holding company analogy, they forget an important difference.
Berkshire Hathaways' talent and specialty lies in identifying sound-money businesses that are undervalued, and then making appropriate financial and management changes to bring them at or above their book value.
Google, and Alphabet on the other hand is in the business of making highly asymmetric bets on the future. The majority of their gains will come from few investments.
Probabilistically they're in two entirely different domains.
That's a minor distinction without a difference in the public's mind. Alphabet == Google unless you care an unusual amount about that corporation's org charts.
Thanks. I would have expected that Google was either profit or surveillance, while Alphabet (i.e. not-Google) was the rest. It seems more like Google is "mostly not burning money," while not-Google is the rest.
From their most recent 10Q, Alphabet currently breaks down their revenue into two segments:
"Our reported segments are described below:
• Google – Google includes our main internet products such as Search, Ads, Commerce, Maps, YouTube, Apps,
Cloud, Android, Chrome, Google Play as well as hardware products we sell, such as Chromecast,
Chromebooks and Nexus. Our technical infrastructure and newer efforts like Virtual Reality are also included
in Google. Google generates revenues primarily from advertising, sales of digital content, apps and cloud
offerings for enterprise, as well as sales of Google branded hardware.
• Other Bets – Other Bets is a combination of multiple operating segments that are not individually material.
Other Bets includes businesses such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X, and
other initiatives. Revenues from the Other Bets are derived primarily through the sales of Nest hardware
products, internet and TV services through Google Fiber and licensing and R&D services through Verily."
Alphabet (or Google) is not a normal company. According to Alphabet's[0] website:
As Sergey and I wrote in the original founders letter 11 years ago, “Google is not a conventional company. We do not intend to become one.” As part of that, we also said that you could expect us to make “smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.” From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have.
This was the idea of alphabet - Google the search engine is one of the companies Alphabet holds. Google is an established company that can be milked but revenue has probably grown as much as it can.
To continue to show growth, alphabet planned to bet a moderate investment on entering new sectors with huge growth prospects, making medium term investments by buying leading companies and giving them the funding they needed to get ahead.
This is why Google no longer does stuff like Google X, 20% time etc - as a subsidiary they have got out of the innovation business, at least any more than other established companies.
https://www.reuters.com/article/us-alphabet-google-bets-fact...
reply