If you have not been anywhere near any of your social media feeds today, then you might have missed some quite big news that came through. Google is no longer Google, but instead, is Alphabet. At least, the Google that we used to know is now Alphabet, as Google is still Google, but is also a subsidiary of Alphabet. If it all seems a little confusing then you’re not alone. It is confusing.
In fact, while many are digesting the news that Google’s powers-that-be have formed this new super company, of which Google is now a part of, some will begin to start asking why would they do this.? That is, if they haven’t already. In fact, some are probably thinking that it is quite the madness move from Google’s Larry Page and Sergey Brin. Although, in truth, it was probably a long time coming and a move that really should have been expected.
According to Page’s blog posting today, the posting looked to explain that Alphabet allows for a more cleaner view of the overall company…what we previously knew as Google. As such, a number of smaller Google entities are being removed from Google and forming their own existences under the Alphabet tag, essentially, alongside Google. Although, this makes sense from the fundamental viewpoint, it is also where the reality of what is going on with Alphabet lies. Google, for a long time has been moving in many different directions and this multi-directional approach has inevitably led to levels of fragmentation. It now seems that the level of fragmentation is becoming so great that the ‘Old Google’ is better off being this ‘New Google’ and not being associated with this more distant Old Google entities
The other benefit of this is the distance the New Google can put between itself and those entities. For instance, it is no secret that Google has been under immense pressure of late from Government entities and especially in Europe where they have been under the antitrust spotlight for some time. In fact, it has largely been thought that the EU was planning on somehow attempting to break down the Google entities to stop Google from becoming too big. Essentially, dismantling the company in an attempt to dampen any sort of monopoly it may have. Well, this is sort of a proactive move from Google, has now essentially meant that the company has dismantled itself, while also strengthening its overall position. And in doing so, has managed to avoid complications arising from one sector of the Old Google pie tainting the other sectors.
Google is and has always been a search and data driven company and this new approach will allows Google to maintain and really push forward in that aspect alone. For instance, Page has already confirmed that a number of the Old Google entitles like Maps, YouTube and the Play Store, will all remain part (or under) the New Google. These are all prime search, data and ad-driven businesses and therefore, further highlights that the Old Google becoming the New Google will continue to drive in that direction.
Likewise, the more obscure (for want of a better word) Old Google companies like Google X, Life Sciences, Calico, Nest, Fiber, Google Ventures and so on can all go on to create their own independent existences without any impact at all on the New Google (main revenue stream) brand. As such, the pursuit of Driverless cars, robotics, Project Loon are all aspects which can continue with their strange direction and have next to no impact on Alphabet’s core business….which will still be Google. Similarly, no impact on the financial position of the New Google, regardless of how much these other entities cost. In fact, while many entities like the EU were looking for a way to effectively limit the impact of the Old Google through dismantling, they may have just given the idea to the Old Google on how they can truly safeguard and future protect themselves…through Alphabet.