Waymo, X and Loon may be “moonshot” companies trying to change the world, but that doesn’t give them the right to eat for free at Google’s cafeterias.
A new report by The Information’s Nick Bastone and Jessica Lessin provides a revealing look into the relationship between Google and its sister companies at the Alphabet parent company, five years after Google founder Larry Page overhauled Google to create the Alphabet structure.
The various “Other Bets” companies, which include the Waymo self-driving car business and the Loon internet beaming balloons business, must pay a “shared services fee” to use Google resources like the famous on-campus cafeterias and the shuttles that ferry employees to work and back to their homes, according to the report.
The system has apparently caused some tension within Alphabet. Andy Conrad, the CEO of Alphabet health tech company Verily, reportedly pushed back against paying Google the fee since Verily had its own cafeteria. And when Google began charging Verily for using its in-house platform for tracking job applicants, known as GHire, Verily switched to a similar product from a different company, Greenhouse, in 2017.
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Both Verily and Google did not immediately respond to Business Insider’s request for comment. A spokesperson for Verily told The Information that she had “never heard” of Conrad’s resistance to the shared services tax, and had switched to outside vendors when it “made sense” for the company’s size and scale.
The report illustrates the Google brand’s continued influence on Alphabet’s other units, despite its original mandate to help give companies some distance from Google’s bureaucracy and way of life.
Alphabet units are still required to send monthly reports to Alphabet executives who retained their positions at Google, the article said. And Ruth Porat, the CFO of both Alphabet and Google, was appointed to hold these units accountable to bringing in revenue.
There’s been speculation as to whether the company will stick with the Alphabet structure, now that Google founders Larry Page and Sergey Brin have stepped down from day-to-day roles at the company and installed Sundar Pichai as CEO.
So far, Google has swallowed up three of Alphabet’s other subsidiaries: Chronicle, Jigsaw, and Nest. One of its other subsidiaries, Makani, was shut down on account of a “risky” road to commercialization.
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