Alphabet Spells a Digital Ling Temco Vought
October 4, 2015
I read “O Is for Official: Google to Morph into Alphabet Today.” Here’s the MBA (not technology) maneuver:
The Wall Street maneuver doesn’t alter day-to-day operations at any of the companies. Though, as we’ve reported [the we is the real journalistic outfit Recode], the financial engineering will give Alphabet more room to justify its spending to investors, and more leverage to scoop up companies. Inside the corporate campuses the move may, if implemented as designed, give the companies more room to innovate and provide employees with more space to feel entrepreneurial.
Fine with me. I would point out that the shift from DEC Alta Vista engineering to “financial engineering” is, like 2006, an important turning point for the Backrub wizards. Messrs Brin and Page have moved from National Science Foundation thinking to the world of Jimmy Ling and T Boone Pickens.
The parallel for me is Tyco (which did not work out for the art lover at the company) and my favorite roll up Ling Temco Vought. As you may recall, the okay outfit Ling Electric Co. “morphed” into Ling Temco Vought and then, at the end of the trail, LTV Corp. and finally into LTV Steel. From circuits to commodities between 1947 and 2000 when the outfit filed for bankruptcy.
I recall that someone with lots of money told me that Jimmy Ling “invented” the modern conglomerate. I don’t buy that. I think of his innovation as what I call the three Rs: Roll up, Restate, and Rename. As I was finishing graduate school, LTV grew from $35 million in turnover to about $4.0 billion. Nifty.
The notion of diversification complemented strong positions in certain sectors like aerospace.
What happened was that there was pushback and investigations. The company lost touch with some markets, reorganized, and eventually ended up bankrupt. There are a number of books and business school case studies about LTV’s exciting journey.
The point is that the Alphabet Google is embarking on a journey which may allow me to watch AG follow LTV’s footsteps down a path which, one hopes, leads to a brighter, less contentious future.
Now the big question, “Is this shift or morph as the article states a good thing?” Yep, some stakeholders, lots of lawyers, and many pundits have a digital Comstock to mine. The Alphabet Google thing may be a digital variant of Ling Temco Vought.
Stephen E Arnold, October 4, 2015
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