View profile

Why Alphabet's days could be numbered

Revue
 
The tech world has gone a long time since a day like Tuesday, where the industry’s tectonic plates sh
 
December 4 · Issue #424 · View online
The Interface
The tech world has gone a long time since a day like Tuesday, where the industry’s tectonic plates shifted in a fashion sudden and dramatic enough to send newsrooms into momentary turmoil. Being sent into momentary turmoil is half the fun of being a reporter, of course, and so I didn’t even mind when I had to throw out a half-written column about political ads (that hoary old topic again?!) in favor of a send-off for Google’s departing co-founders.
Now that we’ve had a day to consider the implications, it seems striking that there are only two real lines of thinking emerging.
The first is: remind us who Sundar Pichai is, and also can he possibly resolve the many challenges in front of him?
The second is: why does Alphabet exist again?
Let’s take them in order.
Sundar Pichai is the 47-year-old CEO of Google, and as of yesterday, the CEO of its parent company, Alphabet. He comes from humble beginnings, as Mat Honan captured beautifully in this profile from a few years back. Pichai joined the company in 2004 and ran Chrome and Android before being named CEO in 2015. He attended the 2013 Google holiday party while still a Chrome executive and was very nice to me personally, which is consistent with virtually all other reports of his behavior.
Pichai also has a lot on his mind, as my colleague Dieter Bohn points out:
His most important job lies within Google still, and it’s not just cleaning up the effects of Google’s culture on its products. Instead, it’s stabilizing the culture itself. After that, it’s navigating the new world of regulation, antitrust, the techlash, and well-justified privacy concerns from its users (aka everybody who goes online).
Google’s internal culture is changing rapidly, and the list of how employees are beginning to lose faith is not short. There’s the James Damore mess, the Google Walkout that followed the revelation of Andy Rubin’s payouts, the scaled-back TGIF all hands meetings, and most recently the accusations of employee retaliation.
Then there are all the Congressional hearings to come, with Pichai likely to be cast in the role of punching bag for lawmakers concerned about data privacy, competition, algorithmic bias, and other thorny issues.
On the other hand: Wall Street likes him. Shares of Google rose 1.9 percent after he was named CEO of Alphabet, adding $2.3 billion to the net worth of Page and Brin.
And what about Alphabet, the holding company Google established in 2015 when it made Pichai CEO? Well … no one is quite sure why we need it any more. The original idea, as Shira Ovide writes here, was to “give operational independence and a separate budget to nascent projects inside the company such as driverless cars, health-care initiatives and novel approaches to internet services.”
But that may not make sense much longer, Ovide continues:
Shielding Google from those “other bets” such as driverless cars no longer seems so urgent. Alphabet and other tech titans — particularly those effectively controlled by their founders — have a relatively long leash from investors to invest in both the projects that generate earnings now and on whatever comes next. Amazon, for example, spent $14 billion to buy a niche grocery store chain, and it’s investing in far-flung businesses such as health care and entertainment.
Amazon has always received a longer leash to tinker than most other companies, but I think Google’s cash firepower also lets it experiment without creating an artificial structure to shield Google from its less mature corporate cousins. There may be a reason that Alphabet never became a blueprint for other technology companies that wanted to keep up with the times. 
Plenty of columnists weighed in over the past day to suggest that Pichai running Alphabet won’t change much, but Matt Levine offers a compelling reason that it might. Page and Brin seemed to be focused mostly on distracting side projects, but Pichai wasn’t hired to play the role of visionary founder. His job is to be a professional CEO in the Tim Cook mold — and that could mean more focus on YouTube and Google’s other core moneymaking activities:
Pichai will still get detailed YouTube information, and Page still won’t, but now Pichai is the CEO of the whole public company. Presumably — who knows! — he will devote more of his time to YouTube, which is both a huge cash generator and a political lightning rod, than he does to, like, Moonshot Number 13 or whatever. Perhaps this will change Alphabet’s disclosure; perhaps they’ll find a way to keep things vague. But surely it will change Alphabet’s business. Having the CEO involved in the money-generating business is different from having a CEO who isn’t. It feels weird to type that. Usually it’s just a given. Most public-company CEOs spend a lot of their time working on the parts of the business that make the money! Alphabet was an unusual experiment in not doing that, but now it seems to be over.
Are Alphabet’s days as a holding company numbered? Ben Thompson thinks so, noting that the company’s “other bets” division lost $941 million in a single quarter. The team at The Information thinks so too, calling it obsolete.
If the result of yesterday’s changing of the guard is that the other bets wither away, and Pichai focuses Google on its core suite products, that would seem to me like a very big change indeed.

The Ratio
Today in news that could affect public perception of the big tech platforms.
🔼 Trending up: YouTube helped reduce the average amount of time viewers in the US spend watching conspiracy theory videos — and other so-called “borderline content” — by 70 percent. The announcement follows a change in YouTube’s algorithm which seeks to limit how often its software recommended videos espousing fringe views.
🔽 Trending down: Amazon working conditions are back in the news in a negative way, with more than 200 delivery workers in Sacramento signed a petition asking for paid time off. They say they receive fewer paid days off per year than typical Amazon warehouse workers.
Governing
Ring, Amazon’s home surveillance company, has been throwing parties for police and giving them free devices in an attempt to get in good with law enforcement. At one party, employees wore “FUCK CRIME” shirts and racist costumes of Native and indigenous Americans, reports Vice’s Caroline Haskins:
Ring has over 600 partnerships with law enforcement agencies around the country, and this number is increasing daily. The company has spent the past three years systematically making sure police everywhere know and recognize Ring, quietly building a nationwide surveillance network through police partnerships, and embedding itself into the functions of law enforcement. This network of police partnerships isn’t only unusual because of its size and scope. Behind the scenes, Ring is experimenting with emerging technologies, as well as pursuing a partnership with at least one other private surveillance company.
The number of Ring partnerships with police grows almost daily, and, to date, there has been limited public debate about whether these partnerships should exist in the first place. Unless lawmakers curb or regulate the expansion of these partnerships, what we are seeing now is just a minuscule version of this company’s full potential.
The 2020 Census has been plagued by hacking threats from people in Russia. The Census Bureau is working with an outside contractor on the project, which now faces serious reliability and security problems. (Nick Brown / Reuters)
Elizabeth Warren is said to be working on new legislation that would give the government more power to punish antitrust violations. It’s the latest indication of Warren’s intent to break up Big Tech, which has become a cornerstone of her presidential campaign. (Ashley Gold / The Information)
Elon Musk’s defamation trial started this week today. The claim was brought by Vernon Unsworth, who helped rescue a boys’ soccer team and their coach from the Tham Luang Nang Non cave system in Thailand, after Musk referred to him on Twitter as “pedo guy.” (Elizabeth Lopatto / The Verge)
Genius Media is suing Google over alleged anticompetitive business practices it says have hurt its business. The move comes five months after the company accused Google of publishing lifted song lyrics. (It’s a bit rich for me, given that Genius hosted stolen lyrics for years.) (Robert McMillan / The Wall Street Journal)
A fast-spreading Facebook rumor has sparked fears that men driving white vans are kidnapping women all across the United States for the purposes of sex trafficking and body part sales. There’s no evidence this is actually happening, but the the mayor of Baltimore issued a warning based on the unsubstantiated claims. (Donie O’Sullivan / CNN)
A study by Avaaz suggested misinformation on Facebook might actually be worse in 2020 than it was in 2016. While that thesis might be overstated, the study does reveal limitations in the company’s misinformation detection systems. (Will Oremus / OneZero)
Schools are investing heavily in expensive surveillance systems to keep kids safe, but there’s little evidence the technology works. In fact, studies suggest it might do the opposite, by breaking down trust relationships within schools and discouraging people from reaching out for help. (Todd Feathers / Vice)
Industry
The decision comes amid pressure from Color of Change, a civil rights advocacy group, urging the companies to stop promoting plantations that formerly had slaves as wedding venues altogether.
“The decision to glorify plantations as nostalgic sites of celebration is not an empowering one for the Black women and justice-minded people who use your site,” the organization wrote to the Knot Worldwide executives in a letter reviewed by BuzzFeed News. Pinterest also received a similar letter from the group.
Instagram will require birthdates from all new users starting today. The move will expands the audience for ads related to alcohol and other age-restricted products, while offering new safety measures for younger users. (Paresh Dave / Reuters)
Facebook’s New Product Experimentation Team is exploring podcasts and travel apps, among other things. The group’s mandate is to build the future of Facebook. Just in case the company isn’t legally allowed to acquire the future, like it has in the past. (Mike Isaac / The New York Times)
Facebook often announces useful sounding tools, then rolls them out incredibly slowly, this piece argues. “Off-Facebook Activity,” which allows people to manage how their data is tracked around the web, still hasn’t been released to many Americans months after it was announced. (Brian Feldman / Intelligencer)
Mark Zuckerberg and Priscilla Chan gave CBS an inside look at their family and home. We learn they are “pretty good” about date night. Larry Page quit Google so that he would never have to do a segment like this!
Google is rolling out more wellness features, this time with the launch of Focus mode for Android. The feature, which is currently in beta, lets you pause distracting apps and and mute notifications for a set amount of time. (Abner Li / 9to5Google)
In 2019, Reddit saw a 30 percent increase in monthly active users and a 53 percent jump in monthly views — a very good year for the company. The news comes 10 months after Reddit accepted a $150 million investment from Chinese tech giant Tencent.
A LinkedIn senior executive, Christina Hall, has resigned after breaking “compliance” rules. Hall was in charge of human resources. (Giles Turner and Amy Thomson / Bloomberg)
TikTok updated its gift policies to protect younger users. While 16-year-olds can still host live-streams, only users ages 18 and up can purchase, send, or receive virtual gifts.
And finally ...
✿
this is why i don’t delete facebook https://t.co/8G2z5LGZv8
2:08 PM - 2 Dec 2019
Talk to us
Send us tips, comments, questions, and your favorite Sundar Pichai fun facts: casey@theverge.com and zoe@theverge.com.
Did you enjoy this issue?
If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue