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Comment by rayiner | Hacker News Reader

Most large companies don't have the financial flexibility that Google's near-monopoly on search offers. Lots of ten-billion per year in revenue companies are eking out 5% margins in extremely competitive fields and can't afford to be distracted by ambitious projects. AT&T is locked in tight competition with Verizon in a very capital-intensive market, and can't afford to divert capital to blue-sky projects.

Back when AT&T was a monopoly, we did see innovative projects like this come out of them. At the turn of the century, linking everyone in the U.S. with phone lines was a pretty blue-sky project. The AT&T phone network was a marvel of engineering of the time. And of course Bell Labs gave us tons of innovations.

That's the beautiful thing about being in a market where you're not scraping around in the dirt trying to claw out the eyes of your competitors.

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That's pretty weak defense of AT&T. They have 250,000+ employees. They spent half a billion dollors in alternative fuel vehicles investments in 2011 alone. They have 20B of total capital investment a year. Blue sky projects such as Loon typically takes couple of dozen employees and may be few million dollars to kick off - small enough to be rounding errors in AT&T's budgets. If I have to imagine, the reason AT&T doesn't do this is probably because (1) their leadership has lost habits of innovative/creative envisioning (2) their leadership probably laughed this off because potential for revenue from people in Sahara was not very tempting (3) Their middle management is not empowered or willing enough to paddle such ideas to top in the first place (4) They simply doesn't have setup where bottom-up vision is possible anymore so unless leadership envisions it and executes, it doesn't get done.

The lack of money and employees is probably the last thing that would prevent AT&T to do these kind of projects.

This financial flexibility certainly helps, but Google is hardly the only tech company with loads of cash. Consider Apple. They have famously high margins and insane cash reserves, projected to grow beyond $170 billion in 2013[1]. And to caricature a bit, they are dead focused on creating the most comfortable sofa browsing experience for rich people. This focus is good, it yields amazing products, but I do give Google credit for investing in such a crazy project as Loon, with the potential to benefit the poorest regions of the world.

[1] http://paritynews.com/business/item/847-moody-apples-cash-re...

Financial flexibility is nothing.

For most organizations the task of running these sort of experiments will easily come at a chicken feed cost.

However the real problem is really amidst all red tape, most middle management can't tolerate smart engineers. It threatens them, they feel insecure that smart people will ultimately replace them.

There fore they make all attempts to stop anything big from ever happening. Running daily affairs as usual is OK. Its in their interest to keep rewards, motivation and level of work such that their positions are safe.

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