Exactly, just because you have a lot of cash doesn't mean you should force investment into things that may not make sense. It's like if you had a huge buffet and force fed yourself until you threw up. If anything, Google probably gets flak for having too many ideas and being all over the place. People keep saying they need more focus, yet when they do that, they get accused of not having any more ideas...

Investors and board members would be way more wary of how the company is run if Google decided to do drastic things outside the scope of their core business (like Google Amusement Parks) for superfluous reasons, which would further make them lose money is the stock sinks.

At Google’s size they can invest a lot in R&D and product iterations, but because they are so big the innovation seems way less drastic relative to their size. Put it this way, if I put a new motor, deck, and paint on a small boat, it would seem like I did a lot, whereas if a giant cruise ship did the same thing, it wouldn’t really carry the same impact to outside viewers.

I mean, at the alphabet scale, they have pretty wild stuff like waymo, loon, verily, calico, wing, etc. Even at Google, there's pretty cool tech too like stadia, soli, duplex, and so on.

This deftly misses Theil's point and the supposed fallacy is wholly irrelevant. Alphabet's success came off the back of world-changing innovation; now their best offering is the stagnant status quo, yet they position themselves as creatives building the future.

Except that even without explicit innovation, the status quo is anything but stagnant.

There are opportunity costs and risks associated with holding onto excess cash. Continuing to hold that cash sort of implies at least some difficulties in making a decision on what to do with it. Doing nothing, or just sticking the cash in short-term securities, has a cost of its own. That's not the same as thinking the company has no ideas, of course. But for companies like Apple and Google, those ideas often aren't necessarily capital intensive ones--at least relative to the size of their cash holdings--and when they're successful, can wind up exacerbating the problem by generating...more cash.

This is a semantic argument which misses the point.

Let's rephrase:

Alphabet has far more cash than it has ideas, which is definitely a good sign that it is far past being classified an innovative company and stockpiling it can be seen as denial.

This is measuring innovation by how big a spender you are. Maybe that isn't a good metric? It seems likely that whatever other companies you consider innovative also aren't spending hundreds of billions on their ideas.

So, the point is that they have a ton of cash. You hold cash because you want to invest in your own company. Implicitly, by not paying it out as dividends or buying back stock with that money, Alphabet is saying to the market "Trust us, we'll put that money to better use than you would. We'll make you a lot more money with this money"

To look at it from another perspective: if it's cheap for you to innovate, ok great! That means you can innovate a bunch more! Spend all that cash innovating away! Oh, you can't spend it all? That means you don't have a bottomless supply of ideas that you haven't been able to try out, it means you're already innovated out and should just buy back the stock to give the money back to investors

Yep, that's why they just announced a $25 billion buyback.

>but they don't add up to needing $100 billion to implement them

Then give dividends?

Like the ones they just announced?