Sergey Brin's statement published as SEC filing | Hacker News Reader

Sergey Brin's statement published as SEC filing

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51 pointspoloolop45 comments

It's probably because the shareholders only care about ads and making more money. He's probably trying to reframe the discussion.

I have a bad feeling that Google is going to have a hard time continuing the way they are without some serious deliverables. I think this is why you can't expect C corporations to continue to "be good citizens" and really push the envelope.

Being on the stock market is a lot like being on the stocks. Hostage.

Larry and Sergei retain voting control through a special class of stock, so no, they are not held hostage by anyone.

http://mobile.nytimes.com/blogs/dealbook/2012/04/13/new-shar...

In other words, what Larry and Sergei care about is what the shareholders care about.

And this is a thing that reassures me Google won't turn actually evil any time soon.

>It's probably because the shareholders only care about ads and making more money.

Not necessarily. Firstly, the only reason people purchase a stock is for that stock to be worth more in the future, they're taking a risk and making an investment. Nothing at all wrong with that. Secondly, I'm a Google shareholder, one who hopes the stock will be worth more in the future than I payed for, the advertising business is very important, the advertising business is essentially funding all their other ventures, which have the potential to replace the ad business and continue the cycle.

>the only reason people purchase a stock is for that stock to be worth more in the future

It depends on what you're interested in. Warren Buffett buys shares in companies he never plans to sell, like Wrigley's, Heinz, Dairy Queen, See's Candies and Coca-Cola, because he's more interested in the annual return on investment than in increasing the capital itself. To Buffett, owning shares in a company means owning a share of the company in every sense of the word. He's often quoted saying "you should only buy shares in companies you're happy to own for 10 years should the stock market close tomorrow".

Actually, no: the whole point is the net present value (NPV) of future dividend payments. The stock rises if there is a collective expectation that the discounted cashflows will rise. That this creates an opportunity to sell the stock at a higher price (foregoing those heightened dividend payments) is largely secondary. Bubbles occur when investors loose track of the fundamentals and focus on the second aspect you mentioned.

Dividends aren't strictly necessary - stock buybacks have the same effect of returning money to those who want it, while being superior (in terms of taxes) for those who would just reinvest dividends anyway.

But its not real money in the share owners hands buy backs are bad you need to reform taxation of dividends make scrip dividends taxfree if reinvested.

Of course the IB make a nice chunk of change for arranging the buy back

Isn't it the other way around? I.e. sure, dividends are cool in principle but the actual reason people buy stocks is to sell it later, because it's a faster way to make money?

But why would the next fool buy the shares at a higher price?

By this line of logic it would be a mistake to buy Microsoft shares on day 2 of trading, Apple shares on day 2, 'insert any successful company' shares when they're higher.

People buy shares because they think it will be worth more in the future, they think the company will be worth more than it currently is. People buy Google at it's current market cap because they think it's going to be worth more.

And the ultimate value of any company is the stream of dividends it generates discounted to the present value.

>the advertising business is essentially funding all their other ventures, which have the potential to replace the ad business and continue the cycle.

I'd never make a bet on any corporation being willing to branch out into something new that will cannibalize its core business. It just doesn't happen. Ever.

He's not saying it'll cannibalise the core business, he said it'd replace it by becoming a bigger profit centre. For example, Nintendo started out in playing cards and went via hotels among other things before arriving at electronics.

Yep :) One day search will not be relevant, Google is trying very hard to figure out what will be important.

Apple replaced the iPod Mini (their best selling product) with the iPod Nano. Apple's iPhone project has vastly superseded their Mac and iPod lines. I don't know the split on Facebook's mobile vs web advertising, but if mobile hasn't passed web, it's heading that way fast. Honda cars outsell Honda motorcycles. IBM sells business services, not mainframes, etc.

In the new book "How Google Works" Eric Schmidt talks quite frequently about the need to be able to innovate even if that means cannibalizing your own products. Because if you don't then someone else will. And when that happens, you die off.

Most incumbants die from not cannibalizing their own products. Innovation is the key to survival.

Android. Google's core business is searching & indexing the web, and then they went and created a mobile OS that siloes information in individual proprietary apps. It seems to have worked out for them, because a.) Android has the potential to be bigger than Search anyway and b.) they've worked out deals to crawl the content of apps.

>Google's core business is searching & indexing the web

Google's core business is selling ads. Android doesn't cannibalize that, it extends their dominance in ads to mobile.

It ain't like people have stopped googling things on their phones now that they have apps, either.

Mobile ads are less effective - there's less screen space available for them, and CPCs are lower, as Wall Street analysts have pointed out every conference call since 2013. Most of Android's revenue comes from the 30% cut Google Play takes.

Amazon started Kindle & Kindle books, which heavily cannibalized their sales of physical books.

Their book business has not been their core business for more than a decade.

Nonetheless, I suppose cannibalizing their ex-core business is pretty exceptional.

> Firstly, the only reason people purchase a stock is for that stock to be worth more in the future, they're taking a risk and making an investment.

Investing for dividend income alone is fine, too.

> Not necessarily. Firstly, the only reason people purchase a stock is for that stock to be worth more in the future

There is the edge case of people buying a single stock so they get invited to AGM and get some kind of vote.

For all of you pontificating on the meaning of this... This is the annual founder's letter. The previous one was also published by the SEC: http://www.sec.gov/Archives/edgar/data/1288776/0001193125141...

I'm wondering if Google going public was a mistake. Whats the point of being "rich" and a "Google shareholder" and other temporary states of existence, if we never get self-driving cars or cure major diseases or get gigabit Internet or get cell phone service that isn't shit.

Seriously, no matter how rich you are, two of those won't happen for you (cure diseases, cell phone service), one of them won't happen the way Google envisions it (the car; even if YOU have a self driving car, you're not likely going to be the drunk driver that kills you, some other poor shmuck that doesn't have a self driving car is), and the last, the gigabit Internet, yes, you can just have the metro ethernet with a gigabit or greater port installed at your house, but the general Internet, the stuff we access normally, isn't designed, optimized, or otherwise meant for speeds that fast, and generally will be massively wasted potential if you're using gigabit for content consumption instead of production and dissemination.

I'm perfectly happy with Google blowing my money on shit I want. What use is money if I can't buy what I really want in the first place? Money keeps turning into some weird hoarding game where the rule are made up and the points may have never mattered in the first place. Money and resources are infinite, but so is human suffering, and since I'm still a human being, the suffering of others fundamentally makes me unhappy.

I'm tired of being unhappy.

Why wouldn't we get those things due to Google having gone public? It seems they are working on them despite having gone public.

As a publicly traded company they are required to be concerned with shareholder value. These pet projects may not increase shareholder value in direct or obvious ways and there is a limit to the amount they can spend on unprofitable endeavors.

They seem to me like projects that will increase shareholder value in very obvious ways.

Curing diseases is one of the ways that huge pharmaceutical companies make money. They sell the cure to people who have no choice but to buy it.

Great cell phone service would allow Google to have a huge advantage over other telcos, or enable dependence on Google from those telcos licensing the technology.

Self-driving cars would potentially enable Google to operate a taxi-like service at massively lower costs than traditional taxi services. By passing a portion of the cost saving on to the consumer and having more reliable cars ensuring a safer ride, they would dominate that industry.

I've not seen any evidence that these projects happening at Google are starved of funding in any way.

The point is - I guess - that those are ways to increase shareholder value long-term, whereas people playing with money only care about short-term profits. So between more ads making money now and curing cancer next decade, shareholders will stupidly push for the former.

> As a publicly traded company they are required to be concerned with shareholder value.

The directors of a publicly traded company are obliged to do the shareholders bidding. First, the shareholders can tell the directors to value arbitrary things, profit is just the default. Second, Google's two founders still have the majority of voting rights. So they are the shareholders directors care about.

There's a fair number of Sergey's babies (e.g. glass, wave) that were never going to change the world or turn a profit. I can't imagine as a shareholder I'd be too happy about these things.

That's an important point. Why Google executives waste money on something cool-seeming that goes nowhere, they aren't wasting their own personal money, they're wasting the shareholder's money.

Maybe Google shareholders would be better off if Google just paid out a big dividend, instead of wasting money on nonsense unrelated to their core business?

Yes, but the majority of shareholders votes are for these things. (Because Larry and Sergey control the majority of votes.)

Why is this posted to the SEC? Im confused, is there some requirement for that?

It's most likely meant to illuminate topics for discussion at an upcoming shareholder meeting, or to otherwise inform shareholders in general about the things contained in the filing.

http://www.investopedia.com/terms/s/sec-form-def-14a.asp

This seems to be an explanation for how creation of wealth is, in practice, performed. For reference, see: https://www.youtube.com/watch?v=00o1JBsLOBg

Take home that, once, aluminium was valued above gold.

Free publicity. Google has always relied heavily on using public resources for their own private good.

Frankly, I thought computers and displays in contact lenses were a pretty obvious idea 20 years ago, but didn't seem like there was a market for it (not clear there is one, beyond geeks who want an email HUD).

The contact lens in the filing has (almost) nothing to do with display technology. It measures blood the sugar level continuously (1 Hz).

The only display technology related thing is integrated LEDs and it's not clear if this has been done or not.

    [...] so we’re exploring integrating tiny LED lights 
    that could light up to indicate that glucose levels 
    have crossed above or below certain thresholds.

http://googleblog.blogspot.de/2014/01/introducing-our-smart-...

I understand that (I work for Google).

Surely you can appreciate there might be a longer game.

As a geek who wants an e-mail HUD and other cool things, I'm disappointed in how the market turns out. There's ton of cool tools we could get and use, and which were pretty obvious 20 years ago, but we're not getting because general population thinks it's too nerdy. Or it's hard to fit what would be a pretty useful device into shiny fitness trinket.

Thanks for reminding me how much I hate reading SEC filings. Is this thing even dated?

The filing is dated:

https://www.sec.gov/Archives/edgar/data/1288776/000119312515...

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