Easy as ABC: Google as you’ve never seen it before

On 10^th August, the world’s largest search engine became a subsidiary.

Google has a new parent company called Alphabet Inc. All existing shareholder structure will transfer over to this new company. Furthermore, each arm of the business will also have its own dedicated CEO. Strange name notwithstanding, this is a bold move. Yet one that is necessary. The markets seem to agree as shares rose by 6%.

So why go to all that trouble of corporate hierarchy? There is precedent. YouTube under Google has operated with its own CEO. The logical step would be to implement this strategy cross company as Google is no longer just a search company. It has a diverse portfolio that includes YouTube and Android. Both of these brands, however, will still remain under the ownership of Google.

Google in recent history has struggled to show itself as a growing business. Many have argued that Google is falling into the Microsoft trap. Trying to do too much without focusing properly at all. In the process losing its core competencies. Its social network and Google Glass projects can both be considered failures. Neither have taken of, and have caused embarrassment to the Google name.

This fundamentally allows Google to separate the accounts of risky, loss-inducing businesses elsewhere. Google Labs, life sciences and drone delivery departments will separate into Alphabet. It can differentiate the earners from the losers without the Google brand taking a hit on its books. This does mean that in the foreseeable future, revenues at the Google arm will be down, but profit will crucially be up.

Larry Page, now CEO of Alphabet, has said that it isn’t supposed to be a brand in its own right –rather a platform to create new brands. There seems to be an element of truth in that. The trademark for Alphabet and alphabet.com are owned by BMW. Even the Twitter handle belongs to an unaffiliated party.

So, what’s next? The new CEO of Google will be Sundar Pichai. Most people have never heard of him. In October 2014 he became responsible for the product and engineering sides of the internet businesses. It is considered that after Larry Page, Sundar has the greatest level of influence to any Google Product. Like Jonathan Ive to Steve Jobs. It will be interesting to see how he shapes the company to his liking.

This is a bold move by a bold company but, no one got anywhere by standing still.