The CEO of one of Alphabet’s subsidiary companies just proved how dead-serious Larry Page was when he said that blowing up the Google’s corporate structure would make it more “
more accountable” for how it spends its gobs of advertising revenue.
“The fiscal discipline era has now descended upon everything,” the CEO of Alphabet’s smart thermostat company, Nest, told The Information’s Reed Albergotti.
Google acquired Fadell’s company for $3.2 billion in early 2014.
Since, a slew of the company’s products have faced technical problems and Albergotti reports that several planned releases either got delayed or killed indefinitely. Alphabet is reportedly putting pressure on Nest to release a new security-system product by the fall.
Fadell says that Alphabet has put increasing pressure on his company as well as all other subsidiaries.
The message, he says, is “hey, show us your business plan for the year. We’re going to hold you to those numbers.”
Fadell’s candid observation comes less than a week after another sign of Alphabet tightening the reins and increasing its revenue expectations:
The company is also trying to sell Boston Dynamics, the high-profile robotics startup it bought in late 2013 because it isn’t likely to produce a marketable product in the next several years.
Quotes like Fadell’s line up with what Wall Street has been hoping for.
After Google appointed a new CFO in Ruth Porat last year, analysts from Deutsche Bank wrote that her focus on disciplined spending seem to hint at the “dawn of a new era.”