The Long Short Affair

Google is now a subsidiary of Alphabet.

Last year, Google’s products such as its search engine, maps, Gmail, YouTube and Android, made up $74.5bn of Alphabet’s $75bn annual revenue.

That means that every other subsidiary of Alphabet had a total revenue of just $448m, and an overall loss of $3bn.

From automated cars to smart contact lenses, to vacuum cleaning robots. You name it, it’s in Alphabet’s loss-making whacky ideas department.

What this proves, yet again, is the failure of early and lucky success to teach entrepreneurs anything worth knowing about how hard it is to do tech.

What makes it even worse for the Google clowns is that they had access to cheap capital, their shareholder’s capital, to invest in whichever tech butterfly caught their collective attention.

Which means that the ideas that they backed were absent the professional pushback from those that manage risk capital.

I call this a double jeopardy; doomed to fail.

I hope there’s a way to short Alphabet whilst going long on Google.

One thing’s for sure; the recent division of Google and Alphabet must have been constructed to isolate the eventual losses in Alphabet.