The world’s most valuable retailer, Alibaba, carries no stock.
The world’s largest taxi company, Uber, owns no cars.
The world’s most popular media conglomerate, Facebook, creates no content.
The world’s largest accommodation provider, Airbnb, owns no property.
The creation of intangible value through internet assets has been a popular trend in modern history. In the past this has led to disastrous vicious-cycles, (similar to positive-feedback-loops), that can cause an economic system to descend into chaos.
Speculation on the value of internet assets was what caused the .com bubble of 2000 to inflate - burst. The bubble that popped in 2000 was an asset price bubble that resulted from the explosive stock market growth as the internet emerged. Another period of rapid tech development is almost upon us; in the future it will be referred to as the Machine Learning, AI, and/or Quantum Computing revolution.
Having said that there's the possibility of enormous technological growth in the near future, I'm not saying it will happen tomorrow. The United States could very well end up in another recession if the economy doesn't react well to the unprecedented treatment it's received from the Federal Reserve, ZIRP, etc.
Irrespective of the domestic/global economic landscape, technological progress is inevitable. As time passes the electronics humans use worldwide will only get smarter, faster, and more advanced.
Technological progress sees no regression.
(unless you work at Apple... Iphone 6s > Iphone 7)
The Financial Instability Hypothesis is one of the crowning achievements of Hyman Minsky. It blames debt accumulation for financial crises, emphasizing the macroeconomic impact of three classes of borrowers.
1. Hedge Borrowers - Hedge borrowers are the safest type of debt, as they have the ability to pay back principal and interest regardless of whether or not they are offered additional credit.
2. Speculative Borrowers - Speculative borrowers take out debt less responsibly, they are capable of paying back principle, but must borrow again to make interest payments.
3. Ponzi Borrowers - Ponzi borrowers are incapable of making principal/interest loan payments without additional sources of credit. Ponzi borrowers only remain solvent if they're investing in consistently/indefinitely appreciating assets.
The issue with ponzi borrowers is that no investment appreciates indefinitely. If you could invest for guaranteed return, then it wouldn't have been an investment in the first place.
A combination of asset prices declining and too many ponzi borrowers existing causes macroeconomic issues. Specifically: ponzi borrowers start defaulting across the board, asset prices decline more sharply, causing speculative borrowers to start to default on their loans too. If the lending situation is bad enough, ponzi defaults can even cause some of the hedge borrowers to start to fail.
Google's new texting app Allo will be their alternative to Apple's I-message and Facebook's Messenger. Allo comes with Google's new virtual assistant built in; Similar to (Apple/Siri, Android/Cortana).
Like all of Google's "free" products they use your data to improve their business operations. If you read my Alphabet Article, you'd know just how many business operations Google uses your data with.
With Allo it's different. As a machine-learning based artificial-intelligence program, Allo will be able to use all of it's users messages as raw data for machine learning algorithms. Alphabet/ Google will likely have a program capable of human-level intelligent conversation within a year.
Quantum Computer - A computer that stores information in the quantum states of subatomic particles.
Quantum Computing by the Year
2005: 1st Qubit Developed
2007: 28 Qubit Computer, Model of Quantum Transistor Developed
2009: First Electronic Quantum Rrocessor
2011: D-Wave Systems Introduces the World's First Commercially Available Quantum Computer
2013: Breakthrough in Quantum Computer Storage
2015: First 1000 Qubit Computer
Wikipedia - Timeline of Quantum Computing
RT_com. "MIT's New Quantum Computer Could Render Today's Encryption Useless." RT International. TV Novosti, 7 Mar. 2016. Web. 23 Sept. 2016. <https://www.rt.com/usa/334850-mit-quantum-computer-encryption/>.
Perimeter Institute for Theoretical Physics. "12-qubits Reached In Quantum Information Quest." ScienceDaily. ScienceDaily, 8 May 2006. <www.sciencedaily.com/releases/2006/05/060508164700.htm>.
"Worlds Smallest Storage Space, the Nucleus of an Atom." National Science Foundation. N.p., n.d. Web. 23 Sept. 2016. <http://www.nsf.gov/news/news_summ.jsp?cntn_id=112538&govDel=USNSF_51>.
Yale University. "First Electronic Quantum Processor Created." ScienceDaily. ScienceDaily, 29 June 2009. <www.sciencedaily.com/releases/2009/06/090628171949.htm>.
"When the people find that they can vote themselves money, that will herald the end of the republic".
- Ben Franklin
Alphabet Inc. is a pseudo-diversified (all-tech) holding-company with subsidiaries in several fields. The focus on tech reduces Alphabets diversification but increases the likelihood businesses can work together. Strategic partnerships are far easier in a holding company, where it is not uncommon for resources to be shared.
For example, If Google Capital had a significant breakthrough in machine learning, not only would their company be successful; but the new machine learning knowledge would improve operations at other Alphabet subsidiaries too.
List of Alphabet Subsidiaries
Youtube - The popular video service was acquired in 2006, significant source of traffic for Ads.
Search - Google's search feature was the original website.
Android - Google's mobile operating system was released in the 2008.
Maps - A similar project to Google Earth, brings traffic Ads.
Apps - Integrate Googles "free" online apps into your business. Apps include Gmail, Google ____ Docs, Sheets, Slides, Calendar, Hangouts, Drive, and Vault.
Ads - The most profitable service offered by Google. Ads will be an invaluable resource to Alphabet while they continue growing their network.
Google Ventures - Any-stage venture capital firm focused on startups in technology, software, research & development, biotechnology, transportation, cyber security, and agriculture.
Google Capital - Late-stage venture capital firm in big data, financial tech, and machine learning.
Google X - Research and Development operations focusing on artificial intelligence, computational neuroscience, healthcare, and biotechnology.
Jigsaw - Technology incubator analyzing and solving global challenges.
Verily Life Sciences - Healthcare, biotechnology, and life science.
Calico LLC - Health care and biotechnology.
Google Fiber - Communications: internet, cable TV, and phone.
Sidewalk Labs - Urban development, infrastructure. "Build a city from the internet up."
Nest - Home automation software/hardware and integration.
Stackdriver - Cloud computing management services.
Vevo - Online music streaming service.
VirusTotal - Anti-virus software that analyzes software and URLs for viruses.
FireBase - Cloud services provider for business developers.
In September of 2016, the number of products Alphabet offers is incomprehensible.
Is not responsible for your investments.