The Tesla Motors – Google story is one fans of both companies have been telling for years. We’ve heard over and over that Google could or should buy Tesla, although now the story has taken a different twist.
Why is Google reorganizing?
Google announced on Monday that it plans to reorganize into two major entities under a new parent company it will call Alphabet Holdings. Analee Newitz of Gizmodo suggests that Google’s reorganization is about shining a spotlight on its non-core (or “futuristic and downright nutbar”) businesses and products, like the self-driving car it has been working on for years. This view runs largely counter to the belief up and down Wall Street that Google is finally caving in to investors’ demand for greater transparency in its businesses.
Newitz thinks Google must be jealous of Tesla, or more specifically, the automaker’s CEO, Elon Musk.
Google wants to be like Tesla?
She notes that under Musk’s leadership, Tesla is doing lots of “cool things,” like changing the face of electric vehicles, building its gigafactory, and innovating in the area of energy storage with its Powerwall energy storage system. Also the other company of which Musk is CEO, SpaceX, designs and sends rockets into space, or “going to freakin’ space,” as she puts it.
But the fact is that Google doesn’t have to reorganize to show off all the futuristic gadgets and gizmos it’s working on. All of the company’s big fans already know about the Google X labs and the random technology the company is playing with.
In reality, there isn’t anything for Google to be envious of, except perhaps the fact that Tesla is actually making money with its fun, high-tech products, while Google is currently developing a lot of products that may never make it to store shelves. By separating into two main businesses underneath a parent company, the search giant will finally be revealing just how much money its core internet-related businesses are raking in, which will certainly make investors happy, especially if those businesses are as profitable as most analysts believe.
On the other hand though, Google will also be showing just how much money those fun and sometimes pointless projects are losing. It’s quite possible that after a while, investors will grow tired of seeing Google invest and lose so much money on projects that may never actually accomplish anything. Investors want to see money pouring in and smart investments made on products that will make even more money in the future. If the company fails to turn any part of its “other” businesses into money-making machines, it seems likely that investors will head for the exit door.
Class A shares of Google closed up 4.31% at $691.70 per share, while Tesla Motors shares closed down 1.46% at $237.61 per share on Tuesday.