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Comment by nikcub | Hacker News Reader

Six large org groups, run as individual companies, individual budgets, divided by product and all reporting to the CEO - exactly how Microsoft is structured.

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According to dr. christian wentz, the organizational structure of many large innovative companies (Toyota, Procter & Gamble, GE, 3M, IBM, Google, Microsoft, Sony, Hewlett-Packard, DuPont, Honeywell and Whirlpool) , followed certain rules: [1]

1. Delegation of Decisions to Innovation Teams

2. Integration of R&D into the Business Units

3. Co-Location of Teams and Departments

4. Central Innovation Teams

5. Central Innovation Funds

7. Merger & Acquisition Department

Google's recent move is just options 1,2 in this list. nothing special , just a common practice in their situation.

[1]: http://www.the-innovation-machine.com/?p=83

Once you have internal groups or VPs fighting each other, it's all over. This is exactly how large companies fade and slip into obsolescence.

Isn't that where the similarity ends?

and two extremely profitable groups (one in the case of Google) funding the other four (or five, in Google's case)

Microsoft also did the 'more nimble' thing 6 years ago:

http://www.seattlepi.com/default/article/Microsoft-announces...

Which lead to turf war, and over half the org heads were let go over the past 2 years (Ozzie, Allchin, Allard, Raikes, also Bach and Moore)

Google is now also structured as a tech conglomerate, there aren't many of those. It is something that Microsoft went through 20 years ago (ie. going from a one-product company to something more).

There are many parallels, just hope Google learnt something from the Microsoft experience of structuring and management.

>and two extremely profitable groups (one in the case of Google)

Didn't Google announce last year that Android made a billion dollars of profit?

The majority of that is search revenue, so it is booked in the other org. Android books marketplace revenue, which will eventually be a billion dollar business but not yet.

Chrome is also profitable because of search revenue, although I haven't seen a figure anywhere

Isn't "search revenue" actually mostly "Ads revenue"?

What is the boundary on the Ads group? Who controls ads in YouTube videos?

Yes search revenue is ad revenue. I know that for Android it is accounted in ads but I have no idea about YouTube

This article seems to suggest that Android could make a billion dollars in 2012 in revenue, not profit:

http://blogs.forbes.com/ericsavitz/2011/02/08/googles-androi...

Is there a source for $1B in profit in 2010?

The difference between GOOG and MSFT in these situations is pretty heavy. Yes, one product is supporting four or five in terms of profits. But there's a key factor that you're missing.

Looking, specifically, at this: http://saviorodrigues.wordpress.com/2010/02/12/microsofts-pr...

Does uptake in online services increase profit in Office or Windows? Does uptake in Entertainment and Devices increase the profit of Server and Tools? (Tools, perhaps, in terms of IDEs).

The key difference is this: all of GOOG's non-ad products are loss leaders. They increase internet usage - specifically, internet usage on pages that run GOOG ads. As long as their loss leaders increase the profit of their main product, they win.

Investments in Google's side products (email, maps, etc) create a feedback loop, putting more eyeballs in front of their profit machine (ads). They really are in the best position - the more people that use the internet, the more money they make. That's why they're so keen on doing things 'pro bono' - like their fiber initiative, and Android.

> Does uptake in online services increase profit in Office or Windows?

This is exactly what the war within Microsoft over the past 4-5 years has been about

Google is kind of the Microsoft of our generation. I'm sure in a few years people will be calling to have some part of Google separated from another part of Google.

As Microsoft was the IBM of it's day (which is certainly in it's evening, if not quite over).

Here is an good book on the trouble IBM was in before it re-invented itself as a professional services company:

http://www.amazon.com/Big-Blues-Unmaking-Paul-Carroll/dp/051...

A lot of the themes that seem to apply to Microsoft now applied to IBM back in the 80's and will no doubt apply to Google ten years from now.

Maybe Google in 2011 was like Microsoft in 1995 - Just finished building a product that takes all the market share (Search/Android & Office/Win95), stock having increased by 500% over the past 5 years, and about to enter a tech bubble.

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...

If Google will really become the next Microsoft... That means its time to buy Google stocks!

(Disclaimer: I'm about to buy some GOOG)

"History doesn't repeat itself - at best it sometimes rhymes" -Mark Twain

That isn't a list of all of the orgs, it's a list of all of the promotions. Marissa Mayer isn't under any of those people, she just didn't get promotion (having already gotten one recently). She's over location.

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