X development
The next morning, the two people Eugene had been waiting for came to visit.
Eugene welcomed the two founders of Google and had a long conversation with them in the drawing room on the second floor.
As always, in the beginning, we talked about what is going on in the world, and we exchanged opinions about the future of Google and the IT company.
“You didn’t just ask the two of us to meet for the sake of friendship, did you?”
asked Larry Page, who had not spoken much the whole time.
“Of course, meeting the two of them means a lot to me. Google is the world’s largest company at the moment, no matter what anyone says. It has been an old dream to talk with the two people who founded Google and conquered the world in such a short time.”
“I am not brazen enough to say that I conquered the world in a short time with Eugene in front of me.”
Sergey Brin, who has been leading the conversation so far, burst into laughter and threw out a sociable rhetoric.
Obviously, I think Sergey is much more of a businessman than the introverted Larry.
“Of course, there are other reasons as well. Because of X Development.”
“We are well aware that Eugene is a major shareholder of Google. But no matter how much Eugene is, he can’t touch X Development. X Development is downsized enough even now.”
Larry firmly stopped Eugene from speaking.
Eugene is already the largest shareholder at this point in holding the largest number of shares, with the exception of Larry Page and Sergey Brin.
The reason the two founders came to LA on purpose is because of their courtesy to that fact.
However, Larry immediately showed a reluctance to say that he would touch X Development, and Sergei was also slightly stiffening his face.
It deserves it. X Development is an experimental base for realizing the ideals of two people, a research institute for the future, and a playground for nerds.
Before Google changed to a holding company system named Alphabet, there was a research institute named Google X about a 10-minute walk from Google headquarters.
And for a long time, the lab was shrouded in secrecy, where even employees inside Google didn’t know exactly where it was or what it was doing.
In fact, most of the research being conducted at this institute is still unknown.
Although its existence has been known to the outside world, it has only been revealed that they are researching a project with a prospect of 10 or 20 years in a wide variety of fields.
“You seem to have misunderstood what I was saying. We do not want the reduction or abolition of X Development. Rather the opposite. I think X Development should receive more support than it is now.”
“Is that true?”
At Eugene’s words, Larry’s face immediately brightened and asked, and Sergei nodded lightly.
That’s probably because the two people’s love for X Development is great.
While Eric Schmidt led Google, Larry Page spent time at the lab, and since Larry took over as CEO, Brin has taken over.
Supporting X Development by Eugene, the largest shareholder of Google after themselves, would be similar to gaining thousands of horses from the two of them.
In fact, because of the cost of research carried out by X Development so far, not a small number of shareholders were protesting, and it was expected that such opposition would grow even more in the future as it had not produced great results.
However, these two founders could never tolerate downsizing X Development’s research.
The research being conducted at X Development is a nonsense such as floating balloons in the sky to supply the internet to the world, researching technologies that generate electricity with geothermal power, storing energy with salt, and building an elevator to space. full of things to do
Larry Page and Sergey Brin are more like dreamers than businessmen.
While leading a huge IT company called Google, which has dominated the global search market and online advertising market, the two always enjoy taking on challenges for the future.
The two were concerned about the fact that Google’s dominance in the search engine market might one day reach its limit, and for that reason, they are making countless attempts to create a new technology that can dominate an era following Google.
X Development’s studies, which seem only vain to others, are things that, if successful, can sufficiently change the industry structure.
The problem, however, is that not everyone else agrees with those two.
“How much budget does X Development spend per year? About two billion dollars now?”
At one time, it was an institution that was kept secret enough to hide the existence of the institute, so the related budget was not disclosed to the outside.
“Yes. It will be about that.”
Sergei readily admitted.
“I don’t know how you can make enough investments for the future with so little money. Wouldn’t it be even more amazing if at least five or ten times the amount of money was put into it? If Waymo had had enough support, we would have been able to start a business much faster.”
Waymo, known as the most successful among the research results created by X Development along with Google Brain, a deep learning project, is the product of an attempt to create a fully driverless car.
Of course, at this point, it was only on the verge of proving its potential as a business and becoming independent as an in-house venture.
“You certainly know quite a few things.”
Sergei nodded in surprise.
“But shareholders will not be very happy to put more money into X Development.”
Larry came in with a horse cut. He is an idealist, but also a person who understands reality well.
“In its present form, it is. As long as X-Development is tied to Google, it will be able to continue with minimal investment.”
Understanding Google’s revenue is just under $20 billion. Just investing 10% of the profits in endless research is a burden enough.
“X Development is still receiving enough support.”
Sergei said in a cold, subdued voice.
He quickly understood the meaning of what Eugene was saying. Larry’s eyes looked like sparks would burst out of nowhere.
Combining the story of not being tied to Google and Eugene’s promise to make a sufficient investment, it sounds like Eugene will eventually take it out of Google.
“Of course it is. However, it is important to note that there is still an ongoing opposition from shareholders. Of course, we also know that the stakes the two hold are enough to stifle resistance from the other shareholders. But sometimes the noise is annoying, isn’t it?”
“Hmm… … .”
Sergei and Larry both own a little over 10% of Google together, but they own B Share, which has 10 times the voting rights of ordinary shares, effectively exercising more than 50% of the voting rights.
It is no wonder that shareholders are dissatisfied with Google’s overall governance structure and voting rights and stakes.
There is pressure from shareholders to revise Google’s governance structure from various sources.
Although Google’s stock price is high enough and it is continuously paying sufficient dividends to quell the dissatisfaction of shareholders, it is unknown how long they will be able to withstand the pressure as they do now.
“I don’t know about this administration or the next one, but you should also think that someday, the political circles may come under pressure with new details on the shares held by the founders of large corporations with new policies.”
“A new tax?”
“In the last decade or so, the concentration of wealth among the wealthy in the United States has grown to the point where it is more and more extreme. The anger of ordinary people who are alienated from the concentration of wealth will one day move the political world. How much tax have you two paid so far?”
The two did not say anything to Eugene’s question.
The founders of huge IT companies have astronomical fortunes as the value of their stocks rises when the company goes public.
However, the founder doesn’t pay a very high tax just by holding the stock.
Moreover, they usually show their dedication to the company by getting a not-so-high salary, but only pay a small amount of tax again because of the low income.
For this reason, the fact that founders of companies with the world’s top asset rankings are paying only a penny in taxes compared to the assets they own may seem precious to ordinary citizens whose asset values are declining after several financial crises. none.
Naturally, the anger of many citizens stimulates the politicians, and the politicians have no choice but to put pressure on the founders of large corporations, even for votes.
In some ways, Wall Street financiers, who earn high salaries and pay taxes on all transactions, are faithfully paying far more in taxes than the founders of these tech giants.
“One day, political pressure may come in that the founders will pay taxes on the amount they hold. If we had to pay even 10% of the tax, do you think the two would still have enough voting rights then?”
The two could not clearly answer Eugene’s continued questions.
“You have to think about the fact that one day you may not have enough stakes. If that happens, shareholders will be willing to take action on X Development, which is not making huge profits right away.”
Needless to say, many shareholders prefer short-term profitable projects to long-term projects that take 10 years or more.
Because Larry and Sergey both know it all too well.
To these two founders, Google was the most valuable asset and future, but to ordinary shareholders, it was just an investment target that could be bought and sold at any time depending on the rate of return.
Even if I could pay billions of dollars a year and make huge profits in 7 or 8 years, if I didn’t own Google stock then it wouldn’t make any sense.
Naturally, organizations with high cost and low efficiency will want to reduce or abolish them.
The reason Larry and Sergey are trying to gain control with ten times the voting right is also because they know too well the tendencies of shareholders.
“So, how does the problem go away when I hand over the X Development to you?”
Larry, who had been listening quietly, opened his mouth.
“ah! There was some misunderstanding. I don’t want to have X Development. I just think that X Development needs a sufficient budget, independence, and leadership from both.”
Eugene smiled and said.