Bernstein’s “Imaginary Interview” With Google’s Larry Page

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Senior analysts Carlos Kirjner of Bernstein Research let his imagination run free in his August 22nd report on the U.S. Internet Sector. In the “Surrealist Edition” of the Weekend Media Blast, Kirjner describes an imaginary interview with legendarily Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) CEO Larry Page.

The interview covers a lot of ground, and poses some difficult questions that are met with equally thoughtful answers. Although ultimately no more than an entertaining intellectual exercise, it seems likely at least part of this imaginary interview is “true” in the sense that some of the answers to the questions truly mirror Page’s point of view.

google before Larry Page

Larry Page on Google’s wide-ranging business interests

When asked the question “When you consider an investment in a new business or funding a new initiative, how do you decide whether it is or is not something Google should do?” Page answered:

“We want to create products and services that improve people’s lives at scale. Products and services that will pass the “toothbrush test,” that is, people will use them at least a couple of times a day and they will make people’s lives better. This is what Search, Maps, Gmail and Android have done. I also believe that it is still really early and there is much more that the Internet, computing and technology in general can do to improve people’s lives.”

Page went on to say that Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) was looking for opportunities to create fundamental improvements in users’ lives, not just incremental steps. He said that is why the company is pursuing projects such as self-driving cars or Project Loon at Google X.…or even Google Fiber. All of these initiatives are still years away from economic maturity, but they can be truly transformational to society and individuals.

Larry Page – Google’s acquisition strategy

The second question Kirjner asked Larry Page was: “Over the years Google has been quite acquisitive and as your cash reserves grow, many people wonder how you think about acquiring other companies. Could you talk about that?”

Page answered, “Acquisitions have been important for us. We acquired Keyhole, YouTube, and Android because we thought they aligned with or helped us achieve our broad mission and because we thought we could help them succeed faster or more than they would otherwise. We acquired DeepMind because we have large scale, real-world, challenging machine learning problems and computing infrastructure that allows them to try to tackle such problems.”

Continuing on the theme of acquisitions, Page said the firm snapped up Waze because they had developed a network of users to capture real-time information about traffic, which also dovetailed nicely with the search giant’s plans for Google Maps.

Larry Page – Distributing cash to shareholders

Kirjner’s final question to Page broached the topic of distributing cash to shareholders. “Google has $50 billion in cash and will probably generate more than $12 billion in free cash flow this year. Is it possible that sometime in the future it would have so much cash that it would make sense to return some to shareholders instead of accumulating more and more cash?”

Larry Page: “Yes, it is possible.”

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