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Google Is Restructuring Under a New Company Called Alphabet
Mark Wilson writes: Sundar Pichai is the new CEO of Google as the company undergoes a huge restructuring. Co-founders Larry Page and Sergey Brin are moving to a new company called Google Alphabet which will serve as an umbrella company for Google and its various projects. Google itself is being, in Page's words, "slimmed down" and the change is quite an extraordinary one. Page quotes the original founders' letter that was written 11 years go. It states that "Google is not a conventional company", and today's announcement makes that perfectly clear. There's a lot to take in...Google Alphabet is, essentially, the new face of Google. Page chose to make the announcement in a blog post that went live after the stock markets closed. This is more than just a rebranding, it is a complete shakeup, the scale of which is almost unprecedented.
may have been getting a little impatient with the many directions that Google was going in.
This allows Google to focus on making money from advertisements, while Alphabet can makes bets on many different products
At least that is my take on it
Wherever You Go, There You Are
Google is not a conventional company. It'll rob you in ways you've never imagine before, and will continue to rob you as it morph itself in ways you cannot even begin to imagine.
Actually it would not surprise me if this were being done for legal protection. Google has diversified in so many different areas since its original creation, and many of these different areas have had their fair share of legal difficulties. Presently any legal attack on one of these areas is an attack on Google as a whole. By splitting the company into a bunch of separate legal entities, albeit under the same corporate umbrella, legal risk to the whole is mitigated.
For instance, Google/Alphabet can roll their European presence into Google.eu and be fully compliant with European data retention, right to be forgotten laws and tax laws, while Google.com could be solely US based and outside of EU jurisdiction.
Also, this is really not new. Corporates have been playing this shell game for years, hiding various aspects in companies who's only phyical esixtance is a single shared mailbox in some non-descript office building (many of them in places like Bermuda, Cayman Islands and Ireland). The difference here is Google/Alphabet are being open about splitting their company.
The rumor on the Google blog is that Twitter was looking to offer Sundar Pichai a CEO position, so this move was made to keep him.
Perhaps there are some additional legal protections gained by doing this reorg as well.
-- Everything is wonderful until you know something about it.
Except that the "Google" division - which contains search, apps, Android, and ads - is still nearly all of their revenue.
Based on the divisions they spun off - Life Sciences, Calico (longevity project), Google X, Google Ventures - it seems like it's more of an effort to separate out the big profit center from the longer term projects that aren't directly generating revenue (ie. short term shareholder value).
It's going to let them invest in these really interesting long term projects without shareholders bitching about the risk. Which is awesome, and really does show they are running the company differently than the usual tech behemoths. Just think if HP, IBM, Microsoft, etc had done this *properly* at their peaks (vs spinning off valuable businesses as entirely separate companies like HP did, or repeatedly shuffling the deck chairs like Microsoft keeps dong) - they might still be relevant.