The race to $1 trillion is real.
Just a few weeks ago it felt like Amazon had the lead on ‘wanting $1 trillion’.
Today, Google had something to say. Google is now a holding company named Alphabet (sidebet….Yahoo changes name to Garanimals)
Permanent Capital is fantastic. Berkshire and Warren Buffet have it with insurance and devoted shareholders. Apple has it (cash hoard) and app store. Google has it in search. Amazon seems to have it in ecommerce. Facebook has it in attention and the social graph. Goldman has it but they are too far away. Alibaba is obviously in the race though I don’t count it because China has fake cities.
Google can’t organically grow themselves to $1 trillion fast enough and they have decided (likely wisely) to financially engineer it.
I like it. Mainly because I am long and I like my stocks to go up. The stock is going up. Just the news of it unlocked $27 billion in market cap this evening. For context, that is a whopping 1.5 Twitter’s, or 3 Harley Davidson’s. It is more than the total market capitalization of 321 companies in the S&P 500.
Google is coming for financial markets…(So is Amazon with AWS).
Google will be attacking insurance in pretty fast order and I wonder if it comes through an acquisition or investments. The sales and marketing expenses of insurance companies are too fat. I want to search for term insurance and price it online. I want them to direct me to a Walgreen’s for a blood test. Next day I am insured. No salesman and full faith of Google cash hoard.
The same with brokerage. Google is an investor in Robinhood but can easily buy any brokerage. The brokers are spending north of $400 in customer acquisition and make it up $8 a trade. Let’s be honest that is very 1990’s.
The rest of America won’t take Google as a financial conglomerate seriously until they sponsor a PGA event.