Google's Major Shake Up

Discussion in 'Stock Market Forum' started by gracer, Aug 11, 2015.

  1. gracer

    gracer Senior Investor

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    Google has just announced that it will have a major shake-up, which will be expected to take effect late this year. As part of the shake-up, Google will soon be just a part of a new parent company called "Alphabet." It will still contain Google's main businesses such as it's search engine, mapping and You Tube. Google will be slimmed down though as it's new entities such as Google Fiber, Nest, Google ventures and all the other newer ventures will run separately from the main ones. The CEOs and head will also be assigned in different parts of the new mother company. Alphabet will soon be replacing Google as the publicly traded entity.

    What Do you think of this new move by Google?

    Here's a link for more of the story:

    http://news.sky.com/story/1533601/google-to-become-alphabet-in-major-shake-up
     
  2. baudwalk

    baudwalk Senior Investor

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    It is much too early to offer an informed opinion. The CNBC Fast Money peeps were speculating with no specific information other Alphabet and Google will continue to trade under the the current stock symbols. As of this evening there has been no announcement of a forthcoming conference call or shareholders meeting to explain the why and wherefore. Speculators drove the after hours share price up, but I don't see any recent news on changes in fundamentals. I am certainly not going to chase the stock here.
     
  3. atanasster

    atanasster Active Member

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    Speculation:

    Sooner or later, all large companies slow or completely stop innovation - in tech innovation is the driving factor for growth. When they do realize they have become a large, slow company with too many layers of management, they try to emulate again their success by splitting into smaller divisions - just an attempt to re-juvenate themselves.

    So for me - a bad sign, GOOG does not innovate and they know it.
     
  4. Corzhens

    Corzhens Senior Investor

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    Is this a good move or what? Why does a big company like Google restructure itself? The only reason I can think of is the tax avoidance. That when a corporation becomes a holding company, it handles the taxes and all other affairs of the companies under its umbrella. And what's with the name, Alphabet? It sounds like the first in list, huh. Let us wait and see if this reorganization of Google will affect us.
     
  5. Onionman

    Onionman Senior Investor

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    I think it's just about reconfiguring the company in a way that it becomes a bit more transparent for investors, that different businesses can grow at their own rate, and ultimately some of the businesses can be configured in a way to be sold off eventually. I'm guessing it's all about taking the emphasis away from the search business. Quite a lot of potential investors probably don't even realize they own Android and YouTube.
     
  6. MoneyFiend

    MoneyFiend Member

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    My first thought is tax avoidance alterations. Google and Amazon are both notorious for avoiding regular tax procedures with the use of international mailbox companies and this would be a good chance to reevaluate alternative ways to save more.
     
  7. baudwalk

    baudwalk Senior Investor

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    The amount of SPECULATION on Bloomberg, CNBC and Fox Business is obscene. Reasons for the reorganization -- not a shakeup -- are all over the map. All froth, no clarity.
     
  8. crimsonghost747

    crimsonghost747 Senior Investor

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    Speculation was the be expected. This is a big move, from one of the biggest companies in the world.
    Personally I'm a bit skeptical, as long as the company is doing great (and Google has been) I don't really see a need to make major changes in the way they operate.
     
  9. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I've been long this one for quite a long while, and have made lots of money here. They're still cheap and earning lots of money.
     
  10. petesede

    petesede Guest

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    Exactly this. People need to calm down and read what Google is actually saying. This will not change anything about the way Google functions or how profitable it will be. This is simply Google doing something Wall Street has asked for ages, give a way for all the ´hail mary´ projects to be separated from the financials when Google reports earnings. It is/was very difficult to get a grasp on the core businesses of Google because they have a bunch of expenditures on hail mary projects.

    The only thing this will do is make Google´s earnings statements a little easier to understand if you want to know where they are earning money ( adsense/adwords) and not have that information messed with because they spent a billion dollars on self-driving cars or DNA research.

    Wall Street likes being able to predict earnings and this will help them do that, which is why the bump in share prices. But overall, this changes very little about the day-to-day operations.
     

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