Narrative: Alphabet Lacks Focus
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Planet Labs Inks Deal for Google’s Satellite Business – Bloomberg (Feb 3, 2017)
I first commented on this story when Mark Bergen reported that a deal was in the works a few weeks back, and what I said then was that this was yet another example of the sharper focus Alphabet has had under Ruth Porat. It’s a great example of selling off a business that has very little direct ties to the rest of Alphabet and where the underlying mapping imagery can more easily be bought from a third party – there’s no reason for Alphabet to own satellites itself for mapping.
via Bloomberg
There are too many ways to Google on Android – The Verge (Jan 30, 2017)
I’ve tagged this post against three different narratives, because this little mini-review taps into several broad threads. Firstly, this is about Google and parent Alphabet’s tendency to allow lots of people to work on the same thing in different parts of the company in different ways, which results in a confusing user experience because there are many ways to do the same thing (see especially messaging). Secondly, there’s the fact that on Android Google’s own messy set of services is often duplicated (or worse) with competing services and apps from OEMs and/or carriers. And lastly there’s the fact that even on Google’s own hardware, the Pixel, which is supposed to represent the epitome of Android at its best, this confusion still reigns. I was half-tempted to tag this post against the Google is Ahead in AI narrative too, because though Google does fantastically well at the back-end AI piece, it often falls short on the user interfaces and experiences that present the functionality to the user. The point is, the situation described in this article is far from ideal, but it grows out of several cultural quirks at Google/Alphabet combined with several of the downsides of the approach Google has always taken with Android, and a solution doesn’t seem imminent.
via The Verge
Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results – Alphabet (Jan 26, 2017)
One of the things I was most interested in as part of Alphabet’s results was what happened to the Google Other category of revenues, because that’s where sales of the new hardware devices will be reported. That category grew 62% year on year, but also includes Play store revenues as well as Google’s enterprise cloud service revenues, and has been growing at a decent clip already. I’d estimate around $600-700m in revenue from the new hardware products, which probably translates into 600-700k Pixel sales and sales of Home, WiFi, and Daydream hardware. That’s not a bad start, but of course supply was constrained and distribution limited, so there’s clearly potential for more here. Back in the core business, it’s striking how the number of paid “clicks” on Google’s own properties remains the one big driver of ad revenue growth, while total paid clicks on third party sites and the cost per click on all sites continues to fall. YouTube is the major driver here (those clicks include views of video ads where no-one actually clicks), offsetting the erosion of revenues from the shift from desktop to mobile, and was an obsession among analysts on the call. Sundar Pichai focused his remarks on machine learning rather than AI, although the two topics are closely related – it was interesting to hear Satya Nadella kick off the Microsoft earnings call an hour later with talk of AI.
You might also be interested in the Alphabet Q4 2016 deck which is part of the Jackdaw Research Quarterly Decks Service.
via Alphabet (more on Techmeme)
Alphabet’s Verily Preps for China Entry With Temasek Funds – Bloomberg (Jan 26, 2017)
Verily is one of the most fascinating Other Bets – in some ways, it’s the most completely removed from much of the rest of what Alphabet/Google does, both in terms of its focus and in terms of the business model, which has largely involved partnering with big pharmaceutical firms so far. (We devoted a big chunk of an episode of the Beyond Devices Podcast to Verily a while back, so if you’re interested it’s probably worth a listen – I also wrote a brief summary of my findings here.) Getting outside investment is an interesting way to reduce Alphabet’s exposure to the risks associated with what are rightly called “Bets”, while also potentially allowing these businesses to move faster than they could with Alphabet cash alone, and move into new markets – Temasek is Singaporean, but invests heavily in China. I’m curious to see whether we’ll see this model applied to additional Other Bets, or whether it’s another unique facet of the Verily business which we won’t see repeated elsewhere.
via Bloomberg
Alphabet Gets Matsuoka Back as Nest CTO, After Her Stint at Apple – Bloomberg (Jan 23, 2017)
Another departure from Apple who now shows up elsewhere, this time Nest, itself the subject of recent executive departures. Matsuoka has a long history at Google/Alphabet, and was only at Apple for a brief time – it sounds like the role there just wasn’t a good fit, and perhaps Tony Fadell’s departure at Nest reassured her that the sometimes toxic culture there is changing for the better. In and of itself, not an enormously significant departure from Apple, but obviously now part of a recent string of departures, something that’s worth watching for any signs there’s anything more going on than the usual turnover of talented people on the hunt for the next challenge.
via Alphabet Gets Matsuoka Back as Nest CTO, After Her Stint at Apple – Bloomberg
Alphabet cuts former Titan drone program from X division, employees dispersing to other units – 9to5Google (Jan 11, 2017)
This doesn’t need much commentary – it’s a minor project within Alphabet, and it fits with the increasingly strong narrative about increasing focus and cost discipline within the company. But it’s also worth noting that this is one of several different efforts within Alphabet aimed at delivering Internet access in new ways, the most high profile of which is Fiber, and the company seems to be scaling many of them back at the moment, suggesting a broader de-emphasis on these goals.
The dream of Ara: Inside the rise and fall of the world’s most revolutionary phone | VentureBeat (Jan 10, 2017)
This piece is probably hundreds of words more than you want to read on Google’s failed Project Ara modular phone, but there’s some interesting history here nonetheless, and it also fits into at least two narratives: Hardware is Hard, and Alphabet Lacks Focus. This is just the kind of project that almost everyone who had any sense outside of Google (and presumably many inside it too) knew would never work – the kind of “great in theory, lousy in practice” thinking that Google often falls into. Smartphones are tough enough without massively handicapping many of the things people care about most with a modular approach. Google did eventually kill this project in the Ruth Porat era of austerity, but it should arguably never have made it past the YouTube video the story starts with.
via The dream of Ara: Inside the rise and fall of the world’s most revolutionary phone | VentureBeat
Alphabet Said in Talks to Sell Skybox Satellite Business – Bloomberg (Jan 9, 2017)
This is yet another example of the new focus that’s come to Alphabet under Ruth Porat as CFO. On balance, this particular move seems smart – there’s no differentiation in owning mapping satellites per se, especially if Alphabet isn’t going to be providing Internet access with them. If it can recoup some investment and refocus its business in the process, while maintaining access to good satellite imagery and data, then it’s a win/win.
via Alphabet Said in Talks to Sell Skybox Satellite Business – Bloomberg
Why Google Might Sell Its Fiber Business — The Information (Dec 28, 2016)
Alphabet has been tightening its belt as regards the Other Bets ever since Ruth Porat came onboard as CFO. Fiber has already been pared back and its expansion plans put on hold, but this article suggests it will be spun or sold off entirely, which seems entirely plausible. There’s never been much synergy between Fiber and the rest of Google/Alphabet, and it’s arguably served its purpose.
via Why Google Might Sell Its Fiber Business — The Information