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Comment by bigtones | Hacker News Reader

The 'Hire' product just launched today actually came from an acquisition, it was not developed internally by Google at all.

It was developed by Bebop, a company Google acquired last year for $380 Million that was founded by Diane Greene (Founder of VMWare). When Google decided to bring Diane Greene on full time to run Google Cloud, they had to purchase her company in order to facilitate that. Bebop originally had aspirations to shake up the enterprise software space by building a suite of applications, and the 'Hire' app was the first one they produced. Bebop employees have been working on it since then and had a long beta period before the launch today. As noted in the TechCrunch article, the 'Hired' platform also runs the Google for Jobs website that launched earlier this year.

http://fortune.com/2016/01/04/google-paid-380-million-for-di...

https://www.crunchbase.com/organization/bebop

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> Bebop, a company Google acquired last year for $380 Million

> When Google decided to bring Diane Greene on full time to run Google Cloud, they had to purchase her company in order to facilitate that

Well, that's an expensive hire.

Fwiw ~3.15 Levandowskis

I think it already paid off. She on-boarded Snap, Apple and Netflix

Edit - I am impressed with Diane Greene. She donated all of her take from acquisition of her company - http://www.businessinsider.com/diane-green-donates-150m-to-c...

Does Netflix use Google Cloud? Or do they just support it with Security Monkey?

I thought Netflix was mostly or exclusively in AWS. Could certainly be wrong though.

Pretty sure they don't serve the actual video from AWS.

And now considering the competition from Amazon Prime, I doubt it will move there in the future.

The majority of Netflix infrastructure runs on AWS, sans content delivery AFAIK.

The transition to AWS was completed a little over a year ago and took several years to do.[0]

[0]: https://media.netflix.com/en/company-blog/completing-the-net...

Correction: She didn't onboard Snap.

Maybe you meant Spotify?

Source: I worked with Snap when I was on the Google Cloud Platform team in 2012/2013.

She got them to sign a significant multi-year $1B+ commitment - if that isn't a win, I don't know what is.

How do you spend 1Bi in hosting costs? That's mind-blowing

Well, first you sign a multiyear agreement. Lets call it 5 years. Now you only need to find a way to spend $200m a year on a service that purports to discard your videos pretty damn fast.

How do you do that? I figure a mix of bandwidth, storage, and personal targeting ad-tech. Most folks using cloud vendors are upset at the outbound traffic cost, so that probably costs a pretty penny. Especially when CDN and caching layers are pointless.

She donated all of her share ($150m) to charity to boot.

For an extra $30MM in tax write-offs... because clearly she stands to make more taxable income than the $150MM in stock she donated: https://news.ycombinator.com/item?id=10844592.

I don't quite understand the idea of tax dodging a smaller tax bill by donating a larger amount of money? She had $150mm in stock, and donated it all, avoiding a tax bill of $30mm? If she had paid the tax bill, she would have had net $120mm, but after donating it, she had net $0mm?

There must be something I'm missing here. I've seen these kinds of schemes discussed before, but don't understand how they would work.

TL;DR It looks like she donated $150MM when in actuality she only donated $37.5MM

Can you imagine the optics of an active board member, of a multi-billion dollar company, profiting from said company -- she's on the board of -- buying the company she runs? Good grief that reeks.

She understood she couldn't take that money in good conscience. So, she got out in front of the optics for a small fee by "donating to charity." (I mean look at the comments here applauding her for donating her shares.)

When you donate $150MM in stock, not only do you dodge the $30MM capital-gains tax (at a 20% tax rate), you receive a tax write-off for the full market value of the stock when you donated: $150MM in this case. Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it. Much better than the $82.5MM she'd originally owe. And it makes tax planning a lot easier -- you don't have to worry about timing.

All in all: $120MM net - $82.5MM write-off = $37.5MM total cost to her for shares she didn't even want -- for good reason.

Understand that I don't care. But I would've been more impressed if she had donated those shares to her employees...

Isn't it how tax incentives work?

Effectively she donated a bunch of money to a charity instead of the federal tax fund. Hopefully the charity is more efficient!

It really ought not to be though. I get that the reality is that it is but it irks me greatly that we don't simply tax more heavily and have a social system which works to solve the types of problems that charities aim to solve. Then if you wanted to do "charity work" you'd just work for the government.

I think it does not work for the same reason Soviet-style government-planned economy does not work. The incentives of private persons and of government officials are unreconcilably different.

> Which means, in any year, she can take $150MM in income taxed at say 55%, and pay $0 in taxes on it.

55% is greater than the maximum combined federal and state marginal income tax rate on normal income, and no one making that much does it as normal (mainly, labor) rather than long-term capital gains (which pays lower rates) income in the first place, because no one pays that kind of money for labor, you only make it by capital returns, so, no, she can't even in principal, and even if the tax rates were such that she could in principal, she still wouldn't be likely to be able to in practice.

Firstly, 55% is not greater than the maximum tax rate one could pay on income (especially in CA) [1].

Secondly, you understand that RSUs (restricted stock units) are taxed as normal W-2 income at the time of vesting, right! You pay capital-gains tax on any appreciation in value after said vesting -- should you choose to sell the stock.

You should probably stop spreading misinformation on topics you don't have experience in.

[1]: https://smartasset.com/taxes/california-tax-calculator

> Firstly, 55% is not greater than the maximum tax rate one could pay on income

But it is, AFAICT, greater than the maximum marginal income tax rate [0]; since the deduction affects only income taxes and not other taxes on income, it is the maximum marginal income tax rate, not the maximum marginal rate of taxation on income, that is relevant.

> Secondly, you understand that RSUs (restricted stock units) are taxed as normal W-2 income at the time of vesting

Yes, I do. That doesn't change anything I said. People that are making hundreds of millions of dollars of income in a year aren't making it from RSU vesting, or any other source of income subject to regular income taxes.

[0] just barely; the maximum marginal income tax rate in any US jurisdiction seems to be 39.6% federal + 13.3% CA state + 1.5% SF local, or 54.4%.

Uhm, they do make significant (>$40MM) amounts of money from cash+RSU compensation. [1-5] That's literally what you can find with a cursory search; no digging. Furthermore, the tax writeoff carries through 5 years since it was a stock donation.

And sure, use 54.4% instead of 55%. Don't miss the forest for the trees though.

[1]: http://www.cnbc.com/2017/04/28/google-ceo-sundar-pichais-com...

[2]: http://money.cnn.com/2015/10/14/technology/twitter-omid-kord...

[3]: http://www.marketwatch.com/story/googles-sundar-pichai-is-li...

[4]: https://www.sec.gov/Archives/edgar/data/1288776/000130817913...

[5]: https://www.sec.gov/Archives/edgar/data/1652044/000130817916...

Certainly it was better optics for her to donate the stock to charity, but she didn't come out ahead from it AFAICT.

A simplified example, assuming one year of income from the shares, and one year of $150mm income from Google.

### Keep the shares:

Year1 = $150 - ($150 * 0.2) => $120

Year2 = $150 - ($150 * 0.55) => $67.5

Year1 + Year2 => $187.5

### Donate the shares:

Year1 = $150 - $150 - $0 => $0

Year2 = $150 - $0 => $150

Year1 + Year2 => $150

The first law of tax is that it is always better to have more money than less money. I could be wrong here, but I can't seem to find a way that you come out with more money by giving it away (ignoring donations to your own dodgy charity). I'm a big proponent of charity giving, but I don't see a way to make it turn a profit.

- https://www.bloomberg.com/view/articles/2014-12-09/deutsche-... - https://www.bloomberg.com/view/articles/2014-06-27/texas-bil...

Did you read my reply? You've arrived at the same number I posted in my TL;DR... $37.5MM.

The point was never for her to come out ahead, just less behind.

Why does this matter?

I was simply pointing out that she achieved exactly what she wanted. Better optics. :)

People commending her and commenting how amazing, how selfless, how fantastic it is that she donated all her proceeds to charity.

Understand that her primary motivation in donating was the write-off, not charity.

Otherwise, if she was feeling so chummy, why didn't she instead divide her almost 50% share among the employees that helped build her company? Hint: there's no write-off for that.

I don't get this. So you're saying she made more money by donating AND getting a tax refund as opposed to not donating?

No, I'm saying the cost to her was $37.5MM, not $150MM. For shares that she couldn't accept in good conscience anyways.

Note: She was an active Google board member when they bought her company. That's not how boards are supposed to work generally.

So yeah, she got 30m tax reduction and spent 150m. net "loss": 120m.

and you consider it bad because she could have chosen paying those 30m taxes and keeping the rest (instead of donating it) ?

I don't think there was any value judgment in my comments at all.

The net "loss" to her was $37.5MM for shares she couldn't even use in good conscience in the first place (think team morale, public optics, etc.)

She was an active Google board member when they bought her company. That doesn't exactly look good to the public or to the team.

I don't think you know how tax write offs work...

https://youtu.be/XEL65gywwHQ

Yup, $150MM tax write-off. My mistake, I was in a rush.

That's nice, but let's be honest: She is a billionaire, and will continue to make hundreds of millions, if not billions of dollars during her future tenure at Google. A person of average means donating $500 may be a bigger personal sacrifice than Greene donating $150M.

That may be true in terms of personal sacrifice but not in impact.

Are you seriously trying to brush off and dismiss a $150m charity donation?

oh_sigh, oh, sigh.

Perhaps you can guess the meaning behind my username here.

I dont know why this is being down-voted. While what she did is great, it is a true point in terms of personal sacrifice.

I saw an interview with Bill Gates where he said much the same thing to a comment about his generosity. He pointed out he doesn't sacrifice a single item/experience he wants in life giving away what he does. And a ordinary person that gives a few hundred gives up more than him in terms of what it costs them.

Its a valid point as long as it doesn't take away from the fact the other is also generous.

True, but how many humans are able to take that perspective? If history has taught me anything, it's that our desires don't end when they are satisfied.

As someone who used to give away hundreds when he was on the average wage, no, it didn't really cost me life experiences. When I was on less than the average wage, I never had hundreds to give away, but on the average wage (with no kids), a few hundred didn't make much difference.

Few people giving to charity actually sacrifice their own life experiences to do so. As a result, it seems silly to dismiss philanthropic billionaires. We want more of those, not fewer.

Y'know Bill Gates' current charity, and anti-malaria work, do make me forgive him for his anti-competitive behaviour in th 90s/00s.

How the world changes, eh?

Me too, almost as if acquiring all that wealth, primarily from corporations then redistribution was not something that was pre-considered, surely he is not that smart ;)

Very well said.

How do you know how much money she has? What is her net worth? She's way below someone like Bill Gates (who could count $150M as disposable at .17% of his net worth), and (unless she's doing some impressive money laundering) is not a billionaire. So even if you say she has $999M, $150M is 15% of her money. Unless someone average has ~$3k to their name, $150M is a lot more to her.

How can you say "let's be honest", and than simply pull random numbers out of thin air ?

I hear this line of reasoning frequently and have come to agree with it. Is it even really a donation when donating 150 million has zero impact on your quality of life? There should be some self-sacrifice for it to actually be a gesture of goodwill. I don't pat myself on the back for donating excess clothes.

Misleading typo: s/hired/hire

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