Alphabet joins this month’s garage sales in Silicon Valley. In late March 2016, Bloomberg broke the news that Boston Dynamics was up for sale. The sale comes after Google purchased the robotics company in 2013. Alphabet’s fire sale is matched by Yahoo’s perennial sale of its core business.
It not faulty technology causing the “for sale” sign at the Googleplex. The reason is finance, New York City style. No one knows when Wall Street invaded Silicon Valley; but for Alphabet, it happened last year with the hiring of new CFO, Ruth Porat. Ms. Port came from Morgan Stanley to provide financial discipline to the newly created Alphabet.
Google became Alphabet to resemble Warren Buffet’s holding company, Berkshire Hathaway. As Berkshire’s head, Buffet’s main job is allocating capital among the many businesses owned by Berkshire. In the same way, Ruth Porat’s job is allocating Google search cash among Alphabet’s other bets.
So Boston Dynamics‘ sale shouldn’t be a surprise. Alphabet’s first 10-K announced the changes in January 2016: now Alphabet’s businesses would be managed according to “resource allocation” and “performance assessment”. Boston Dynamics did mostly research and was far, far away from selling a robot.
So with a dim commercial future, Alphabet must have decided to allocate its capital elsewhere and sell Boston Dynamics.