 So yesterday Google announced that it's going to become Alphabet. Yeah, Alphabet is this big holding company and Google's still going to exist inside it with all of Gmail, Search, Android, everything you associate with Google. But all the Google stock is now going to be Alphabet stock and it's going to become part of this much bigger holding company. And that holding company owns Google but it also has Auto, it also has Calico and all these other end dishes. Nest, Loon. All of the Google X stuff. Got it. So what does Google get out of this? Why does it want to separate out all of its different pieces? Yeah, so one of the things that's been happening in the background sort of for the past year and a half now is Google's been doing increasingly ambitious projects that are kind of not really related to the core things. This is the Google X stuff we've been talking about. There's been a lot of news about these contact lenses they're developing and Project Loon and investors have always been sort of nervous about them. They don't really see how they're going to make money. A lot of investors would prefer Google just sort of stick to making money on search the way it's good at making money. And so a lot of this is about kind of mollifying those investors and saying, you know, if you want just the core Google, it's here, you can see it's still profitable. And if these other entities, you know, if they don't work out, if they implode, we can shut them down. If they become wildly successful, we can spin them off independently. And also if we need more funding for them, that funding doesn't necessarily have to come from Google. It can also come from outside, you know, outside grounds. They can IPO independently and they'll each have their own CEO. I mean, so is there any sense that Google is doing this like purely to preempt, you know, regulatory issues or all these countries have been looking to potentially break up bits and pieces of it? I don't think so in part because a lot of, if you were going to break up Google, it's still Google that you would be breaking up, right? The smaller core Google still has all the products that people would be looking at. And also I don't think, I mean, Google's facing a lot of serious regulatory fights, most notably in Europe with the right to be forgotten and sort of the whole tracking cookie issue. But there hasn't really been any serious issue to take monopoly action against it. Do you think that potentially splitting up, you know, Google versus these inter-delivery companies like Loon and Fiber, does that play into it at all? Those are all so tiny though. I mean, I think the percentage of people even in the US that are actually getting internet through Google Fiber is so tiny compared to the whole that it would be very difficult to, I mean, I think it would be like, you know, saying Amazon's movie studio is a monopoly because they're going to take over the film industry, which maybe someday, but for now there's still a very small fish in that particular pond. So I don't think it's regulatory. Also, you know, a lot of people thought it was tax, like a tax break thing, which I think has not borne out as we look closer at the corporate structure and documents. I think honestly it's just there has been this division for a while between the stuff at Google that has to do with making money and the stuff that has to do with the future of the business and the future of the world. And that division has been kind of growing more and more, particularly as Larry Page and Sergey Brin has kind of drifted away from the day-to-day core businesses. And I think basically what we saw yesterday and what we're seeing going forward is that's now a formal division within the company. So Lumen Fiber, this biotech stuff, these are the wildly ambitious ideas that could one day make a ton of money in the future, right? So how does Google balance funding them currently and still appeasing investors who are now, I mean, they're getting a better idea of what's going on with them, right? Yeah. I mean, the punchline is they're sort of going to keep doing whatever they want. They're still going to keep pouring Google money into these. Well, Larry and Sergey, they still have most of the control here. Yeah, yeah. And so they're not, you know, investors want them to shut down these projects, or a lot of investors do, and they're not doing that. They're not going to stop pouring profits from search into these companies because they believe in them and they still believe in them. But the structure lets them become a little bit less of a blank check. So if they need, you know, a ton of more money for self-driving cars and they say, well, you know, this is going to become profitable, but we need maybe, you know, $100 million before it becomes profitable, that doesn't necessarily have to come out of Google itself. It can come out of a separate funding round. And all those projects can be self-directed. Okay. So Google's going to be able to do a better job of building up these individual brands and initiatives that right now are very disparate throughout Google, I guess? Yeah. And one of the things we've seen that's been kind of a problem for Google X has been, you know, they want, okay, so for instance, Project Loon is we want to make a balloon that provides internet access. Okay, so now you've made the balloon. We have the prototype. We know we can do it. What do we do next? Do we become an independent company? Do we become a Google division? How much do we really need to? There's sort of this question of how you take the next step. So what I'm wondering is Loon and Fiber, I feel like those tie into Google's core product. That ties into ad revenue. If people are getting internet, faster internet, they're going to be using more Google products, right? Or at least presumably. So, you know, how do they keep that integration if that's part of maybe what the business is founded on? Well, they're still all the same company. I mean, so I think you will still see people moving from the core Google to these other projects. You'll see technology from Google going back, you know, in and out, back and forth. But I also think to some extent there's this question of was Loon ever actually going to help search revenue? I mean, I think that's kind of an open question. That's certainly something that shareholders were told and I think it's something they were sort of intensely skeptical of. And so part of what we're seeing now is Google, something like Loon no longer has to justify itself in terms of search revenue. It has to justify itself as part of this larger alphabet organization. So where does Google go now that everything is split up? Yeah, I mean, I think the really interesting thing to watch here won't be the core Google, but it'll be these outside projects. One good example is Nest, which was acquired by Google a couple years ago. And you know, its CEO, Tony Fidel, you know, last week he was CEO of Nest, which was owned by Google. And you know, once this whole merger is done, he'll still be CEO of Nest as now part of Alphabet. But I think after the restructuring, someone like Tony Fidel has a lot more options. Suddenly he can raise money outside, he can IPO, he can just do a lot of things that he couldn't when he was still kind of justifying Nest's existence to the core Google products. So Alphabet can really treat these like individual businesses. They don't have to be part of search revenue somehow. They can just be businesses unto themselves. Yeah. I mean, fundamentally, Google hasn't committed to doing anything with any of these projects. But I think what it means is the independent entities aren't just sort of under the Google umbrella anymore. Now they have a lot more options about where they can go. And when we start to find out more about how these different areas of Google or Alphabet are doing? Yeah, I mean, I think when Google decides, well, when Alphabet decides to tell us about them, that's the weird thing. So what they said in the initial announcement was they're going to announce Google profits separately from Alphabet products. So if you just subtract the Google numbers, you'll be able to see all the other ones lumped together. And I think something like Nest is a good example of it may decide to say, hey, guys, we're making all this money. We're going to report Nest profits, too. So it should be as these individual companies become successful. Yeah. But I think it's something like, I mean, we saw this with Apple with how many Apple Watches did you really sell? Right. And I think it's kind of wild, like, we're not going to tell you that yet. We'll tell you that later. It's kind of the same deal where Google may just not tell you how much money the other Alphabet projects are making or swallowing up. But at some point, they could decide to. You never know, which is something that was less likely when they were all just under the umbrella of Google X. So, and maybe this is going back a bit. Yeah. Google's breaking out all these companies that are potentially just losing them money. Is that not scary? Potentially. I mean, I think a lot of them are just money stinks. Yeah, they're just throwing money into these ambitious ventures. I mean, I think the thinking within Google has always been, these are going to be, some of these are going to be the core of the company 20 years from now after search revenue maybe isn't enough to carry an organization of this size because the technology landscape is constantly changing. So these are our long shot bets on the future of the company. And now I think they're long shot bets on... How does it keep people from being scared that they're just throwing away money until that happens though? Like one day the idea is that these will replace or search or should search dry up. Yeah. Well, I think the concern, I mean, in some sense they're just scary projects and are keeping scary projects. I think the concern for some of it was all of the money that was ever going to be poured into Google's self-driving car project had to come from Google search revenue. And that was always going to be a drain on shareholders. Whereas now that looks like less of a blank check and making the commitment of, hey guys, we're going to build a self-driving car because Larry and Sergey really believe in it. That's less scary to people who are just kind of there for the search. So you think this is going to give Google more flexibility? This is probably a net positive? Yeah. I mean, I think the other interesting thing will be to see what happens to what is now Google under Sundar Pichai. Because I think it starts to look, I mean, I think it's still a very ambitious project and I think things like Android One are still really exciting. It'll be exciting to see where they go. But you have to kind of wonder, you know, now they don't have the excitement of we're going to build these huge internet balloons, we're going to be, you know, making drone wind turbines. And so how does that company stay exciting? And I think he's got a lot of answers to that.