By Ilan Adler
Like everyone in the past 48 hours, you probably heard about the new company formed by Larry Page and Sergey Brin, Alphabet. Alphabet will incorporate all Google holdings (i.e Nest, Ventures, etc.) under one umbrella with financial reports for each one. I won’t get into the specifics of the deal, because there are multiple sites on the web which explain is more concisely and better than I can.
What I would like to talk about is one specific paragraph from the New York Times covering the news:
A holding company structure also gives Mr. Page and Mr. Brin, who became multibillionaires when Google went public in 2004, room to make big new bets to add to Alphabet’s portfolio — without annoying Wall Street. Over the last few years, investors have expressed concern that Google has become distracted from its core web search, instead pursuing projects fancied by its founders, like self-driving cars or a pill to detect cancer.
This comment made me really sad, and question what capitalism is come to.
I believe in a free market with regulation to prevent market inequalities. Having said that I also think that some things cannot be quantified under a magnifying glass of financial gain, whether that gain is immediate or happens at all. But I couldn’t get over this paragraph. Besides being a harbinger of death for innovation, reading it implies that if your product isn’t making money, it’s not worth researching and investing in.
Page & Brin come from academic backgrounds, as while I am sure they are interested in making money (tons of it even) this is not the philosophy that is their everyday focus. They want to change the world, and earn a few dollars while doing it, but not just money is what drives them. They believe we are in a new age where tech and disruptive ideas can obliterate the issues that have afflicted mankind for centuries. Other notable tech entrepreneurs that also adhere to this so called philopshy are Elon Musk (clean energy) and Chris Sacca (clean water). I would dub these group of people “Change-aires”, people who have boatloads of money but whose main incentive is change.
But Wall Street? Wall Street just wants them to continue increasing revenue from search ads, increase monetization of YouTube, and figuring out other revenue streams in Maps, Gmail and more.
Wall Street guys use this a its one guiding principle, Its all about the Benjamins‘.
Cancer detecting pills? Don’t bother them with this minutiae; unless it has a bottom line for more profit they can’t be bothered with it. Making roads safer with self-driving cars (bear with this being hypothetically true)? Meh. Not interested. They only care about profits, profits, and more profits.
While I hope that Alphabet/Google still retains its ability to initiate moonshot projects, I fear is that it is beginning to walk the Wall Street line, and use only basic super capitalistic cost-benefit analysis, the type the Wall Street LOVES.