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The WSJ reports Alphabet (GOOG -0.9%) will start charging subsidiaries such as Google Fiber, Google Life Sciences, and Google X (long-term projects) for services such as computing (servers), recruiting, and marketing.
- The accounting move aims to make various parts of Alphabet/Google's empire more accountable for their spending, following years of major investments in high-risk/high-reward projects. The report comes four months after one noting new CFO Ruth Porat has begun "an internal audit examining costs, revenue and accounting systems," and that new hiring restrictions are in place.
- Soon after that, Google posted a Q2 EPS beat made possible in part by spending controls. Porat stated on the Q2 call Google plans to direct ~70% of its spending towards its core business, ~20% towards adjacent areas, and ~10% towards big new ideas.
- A source tells the WSJ Alphabet hopes to eventually "be a family of companies that offers efficient, centralized services to help entrepreneurs grow businesses faster." Over the weekend, The Information reported talks with Autodesk CEO Carl Bass to make Bass the head of Alphabet's robotics unit fell through partly because of disagreements over how much control Bass would have over the unit.