In 1892, the General Electric Company united a wide range of businesses—making lightbulbs, phonographs, sockets, dynamos—under a simple thesis: that electricity was a pretty big deal. GE, of course, was right. It became the dominant holding company of the industrial age, a conglomerate of machine-driven innovation.
Today a new crop of companies are driven by their conviction that the internet, too, is a pretty big deal. And as these firms compete to dominate the digital age, their strategies increasingly resemble that of General Electric of yore.
Google made it plain this week with a plan to reorganize under a new holding company called Alphabet, evoking a Scrabble board of enterprises that reach well beyond its original mission “to organize the world’s information.” Self-driving cars, longevity, and other lofty ventures will stand on their own within Alphabet, alongside Google’s core business, the one that makes lots of money.
Whether born out of boredom, fear, envy, or innovation, the move seemed to make sense of the company’s sprawl. Indeed, some of the world’s largest technology companies are perhaps best understood as holding companies, whether they make it official or not. Facebook has amassed a collection of tangential businesses—Instagram, WhatsApp, Messenger, Oculus VR—intended to anticipate the next big thing. Alibaba has seemingly entered every conceivable digital industry in China.
By managing these far-flung endeavors separately, as Alphabet will, these giants are guarding against the same kinds of changes that made them big in the first place. Put another way, they are trying to learn from the mistakes of eBay, Yahoo, Microsoft, and others that made big bets and acquisitions, only to fold them into a declining core business.
Larry Page, who will serve as CEO of Alphabet, is said to admire the structure of Berkshire Hathaway. The two won’t have much in common to start with, but Page would do well to follow Warren Buffett’s lead in at least one respect: Investments inspire confidence when accompanied by a clear and simple thesis.—Zachary M. Seward
Five things on Quartz we especially liked
GE’s revolution in management. The company that, under its legendary boss, Jack Welch, became synonymous with “stack ranking”—namely, grading employees and firing those who did worst—is now throwing out performance reviews altogether. Max Nisen delves into the industrial behemoth’s culture shift and how it’s looking at the future of management.
Apple’s taste in music. Nikhil Sonnad analyzes data from a month of what Apple played on its new online radio station, Beats 1, and concludes: “Apple is like your friend who’s really into music but not the one who’s really crazy.” Morgan Jerkin shows a darker side of Beats: the misogyny and violence in the history of Beats founder Dr Dre and his rap group NWA, which a new movie about them, Straight Outta Compton, has airbrushed out.
German capitalism has won. Though it “traditionally commingled elements that seem impossibly antithetical to outsiders,” the German model has come out on top as other market economies flounder and stutter. Oh, wait, but this couldn’t possibly have anything to do with the flawed setup of the euro zone, could it? Matt Phillips weighs the arguments.
The enduring influence of Helmut Lang. You know Lang’s clothes, even if you know nothing about fashion: His austere look is everywhere, a decade after he put down his scissors. Marc Bain traces the ripple effects of the designer’s legacy, and the Quartz video team pays a visit to the home of the 25-year-old Lang obsessive who has amassed a collection of thousands of pieces.
Is your gut your second brain? There are millions of neurons around your gut. And gut microbes and tapeworms can affect your mood, memory and resistance to disease. After reading Akshat Rathi’s round-up of recent research, you might even start to think of your digestive system as the real decision-maker in your body, and your brain as just an add-on—which, in evolutionary terms, it is.
Five things elsewhere that made us smarter
How ISIL made rape a part of theology. This—be warned—harrowing, but absolutely gripping report from Rukmini Callimachi and photographer Mauricio Lima for the New York Times relates how the Islamic State took thousands of Yazidi women and girls in northern Iraq and “developed a detailed bureaucracy of sex slavery, including sales contracts notarized by the ISIS-run Islamic courts,” as well as religious underpinnings to justify their rape as part of jihad.
What’s really going on with China’s currency? In the wake of the yuan’s tumultuous week of devaluations, Peking University economist Christopher Balding offers a rundown of theories to explain Beijing’s move. Certainty is hard to come by, but one thing is clear: China’s government may insist that the economy is fine, but “no one is buying it.”
How to rig an American election. Missouri Democrat Claire McCaskill describes in Politico how, to win a Senate seat, she manipulated the Republican primary to favor the hardline candidate so she could go on to defeat him in the election. She dismisses the ethical concerns a little too blithely—some think she might even have broken the law—but it’s a fascinating view into just how distorted democracy can get.
Tile your bathroom with higher mathematics. Any triangle can tile a surface without gaps. So can any quadrilateral (square, rectangle, rhombus, etc). But mathematicians have only just discovered the 15th form of pentagon that can, and this prompts Alex Bellos in the Guardian to explain some fascinating things about the properties of polygons, and of pentagons in particular.
Even unto Kyiv have the hipsters come. Vijai Maheshwari braves beards, flannel, and artisanal ramen burgers for Politico.eu to explore how the Ukrainian capital is fast becoming an “eastern Berlin”—and how the adoption of these Western trends is not just a fashion statement but also, in the conflict with Russia, a deeply political one.
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