Why is monetization and knowledge transfer important?

Alphabet (previously Google) has become a technology conglomerate as it tries to work out which of the business opportunities it is pursuing, from driverless cars to healthcare, will produce a sustainable source of revenue in the future (see Alphabet (1): Case insight 5.4). None of this, however, guarantees that its search for a long-term future beyond internet advertising will yield results, or that the 3 per cent of revenues it spends on what it calls its ‘other bets’ will not be money wasted. Alphabet is trying to prolong its life by giving birth to other successful ventures, fi nanced by the dominant market position of its major revenue-generating subsidiary, Google (whose history we chart in Case insight 16.1). However it is it is still trying to fi nd business models that monetize the innovations it has developed. Despite its fi nancial strength, the lack of a precedent for the type of technology conglomerate it is trying to create, the strength of its competitors and the vagueness of Alphabet’s long-term aims add to the risk of failure (see Alphabet (2): Case insight 7.2). Alphabet’s individual ventures do not have their own boards, and there are no equity arrangements to tie employees’ rewards to the success of their units – and to Alphabet. Instead, Alphabet offers cash bonuses based upon the success in achieving signifi cant milestones. Perhaps as a result, many engineers in the driverless car division are said to have left, often going to competitors offering more money.