Google and its diverse ventures are now part of Alphabet

Google is well-known for its sprawling range of ventures, from YouTube to Android to glucose-sensing contact lenses to self-driving cars to search. Even with that diverse group of ventures, it seems CEO Larry Page felt that it was time for a shake-up. As of today, Google is just one business owned by Alphabet, a new company headed by Page and Google co-founder Sergey Brin. The goal of this new management structure is to make that family of companies "cleaner and more accountable," according to Page's statement introducing Alphabet.

Alphabet is "mostly a family of companies," foremost of which is a "slimmed down" Google led by new CEO Sundar Pichai, who formerly served as the company's product chief. In that role, Pichai controlled virtually all of Google's household-name products, from Maps to Chrome to Android. Ventures that are only weakly related to Google's "main Internet products," like the aforementioned glucose-sensing contacts and Calico, which studies aging and longevity, are becoming separate, Alphabet-managed companies. According to Page, each Alphabet company will have its own CEO, and Page and Brin will "rigorously handle capital allocation and work to make sure each business is executing well."

Alphabet will replace Google as the "publicly-traded entity," effective immediately. Google will become a wholly-owned subsidiary of Alphabet, and Google shareholders will have their shares replaced with an equal number of Alphabet shares. The company will continue to trade under the GOOG and GOOGL symbols on the Nasdaq. When Q4 financial reporting rolls around, Google's results will be reported separately from other companies in the Alphabet family.

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    • Wirko
    • 6 years ago

    They can still choose to use the stock symbol AALP or AALF, thus reaching above AAPL, alphabet-wise.

    • Khali
    • 6 years ago

    Alphabet was the fall back name and was chosen after they realized Capcom has the copyright to Umbrella Corporation.

    • NovusBogus
    • 6 years ago

    Sounds like the prelude to a bloodbath. The days of getting paid to pursue solutions in search of problems must be coming to an end.

    • Noigel
    • 6 years ago

    We determined Google as a business was too singular in focus… so we androided it.

    • Deadsalt
    • 6 years ago

    I’m surprised that no one is reporting the fact that Google Fiber is being pushed out of Google to become its own company under Alphabet.

    [url<]http://time.com/3991798/google-alphabet-companies[/url<]

      • Meadows
      • 6 years ago

      But that’s exactly what they’re reporting here.

        • Deadsalt
        • 6 years ago

        No, not really; if I have to google “Google Fiber Alphabet” to find out.

        Not even the investor page Jeff linked mentioned it. Calico is mentioned as it is a obvious move to be its own company under Alphabet. Fiber was more implied to have been moved but I wanted to be sure that it indeed would be its own thing.

          • Meadows
          • 6 years ago

          My understanding of this news article is that Google will be search and perhaps ads, and everything else is to be separated from it.

          “Fiber” falls well within the field of “everything else”, as it has nothing to do with online search.

            • Deadsalt
            • 6 years ago

            I do see what you are saying. Perhaps my reading compression just sucks today. Still I’d wish the press releases where a bit more clear on what was staying within Google.

      • anotherengineer
      • 6 years ago

      Speaking of Fiber, I could use some All-Bran!

    • blastdoor
    • 6 years ago

    GOOG is up a lot today. Stock market loves monopolists and corporate restructuring. That’s stuff wall streeters can understand.

    • Neutronbeam
    • 6 years ago

    Alphabet? Souper!

    • Meadows
    • 6 years ago

    “A is for Axiom, your home sweet home.
    B is for Buy’n’Large, your very best friend.”

    • Meadows
    • 6 years ago

    Makes sense to separate these things on paper. It didn’t follow that a search engine company would invest in cars or wearable tech, for example.

    • Thresher
    • 6 years ago

    Diversifying is a good business strategy. But this feels like a shotgun blast.

    Expect them to sell off stuff to get back to their “core” business as they figure out that giving all of these companies autonomy is a recipe for anarchy.

      • derFunkenstein
      • 6 years ago

      Google (back in the days when the parent company had that name—it feels like just a few moments ago) could have done that without this crazy-pants reorganization, though.

      • w76
      • 6 years ago

      They aren’t diversifying, so much as making the management structure for their existing efforts more clear.

      But you’re right about the other part. There’s a long arc of business history where firms get together, make big conglomerations (some times of related industries, with horizontal or vertical integration, some times like Berkshire Hathaway and whatever the hell the management thinks sounds good this year), and then eventually realize the corporate center is stifling (or has become stifling, or new management simply isn’t as adept as the old at managing the show) and start spinning off components so they can focus on what they do rather than corporate Game of Thrones.

      And then it starts all over again.

      Google’s got more money than sense and, like every institution stuffed to the gills with millenials, no sense of history, so of course this is what they’re doing, instead of the better thing, which would just be paying a dividend and being more selective about what windmills they tilt at.

        • blastdoor
        • 6 years ago

        Yeah….

        Steve Jobs advised Page to be more focused. Maybe this is Page’s attempt to do that in his own unique way. If he can make it work then he will have defied history and created a company unlike any other, and could possibly surpass Jobs. That would be amazing and exciting to watch.

        I think the more likely scenario is that Google is the only subsidiary that makes real money and eventually Google gets spun off to be its own company and Alphabet becomes Page’s hobby / venture capital business. I’m skeptical that another Google-sized subsidiary will grow out of this.

        But hey — prove me wrong kids, prove me wrong!

    • Zoomastigophora
    • 6 years ago

    Is Larry Page a CCEO now?

    • Alexko
    • 6 years ago

    Is this the Samsungification of Google?

      • blastdoor
      • 6 years ago

      I’m imagining it’s more like the Berkshire-Hathawayization of Google.

    • blastdoor
    • 6 years ago

    Maybe this is an opportunity for them to segment the evil part of the company (creepy privacy encroaching advertising company) from everything else. The trick will be to prove that the different subsidiaries truly are independent. If Google comes asking Nest for data on when people out of their homes, what does Nest say?

      • sweatshopking
      • 6 years ago

      Nest says yes.

        • anotherengineer
        • 6 years ago

        lol nest.

        I have this
        [url<]http://yourhome.honeywell.com/home/Products/Thermostats/7-Day-Programmable/Prestige+IAQ+Total+Home+Comfort+System.htm[/url<] One of these days I will have the time to install it......................one of these days.

      • DoomGuy64
      • 6 years ago

      Maybe not. The first thing that I associate with Alphabet is government organizations. CIA, FBI, NSA…

    • Gyromancer
    • 6 years ago

    Page: “Hey Pichai, what do you think we could do to become a household brand?”
    Pichai: “Well, it seems like everyone has an Apple product. Apple starts with an A and is a very common word, so why don’t we switch our name to Alphabet, it even sounds kinda like Apple.”
    Page: “I like the way you think Pichai. Let’s do it!”

      • Gyromancer
      • 6 years ago

      Something similar happened at Microsoft with Windows 10…

        • sweatshopking
        • 6 years ago

        YOU REPLYING TO YOURSELF?

          • Gyromancer
          • 6 years ago

          Yes, yes I did.

          • MarkG509
          • 6 years ago

          It’s the only way he can have an intelligent conversation 🙂

            • Gyromancer
            • 6 years ago

            Hey man, it’s tough when you’re a teenager, it’s hard to find PC enthusiast friends who aren’t socially awkward. Come to think of it, it’s hard to find any teenagers who aren’t socially awkward.

          • trackerben
          • 6 years ago

          He’ll be fine. I did that, too.

      • Jonsey
      • 6 years ago

      Google already is a household brand. The name is even a verb. People say “I’ll Google that.”

      No one says “wait, let me Apple that.”

        • Gyromancer
        • 6 years ago

        Cause apple isn’t a search engine. I was specifically referring to all the different physical products, such as the chromecast. The point is, Alphabet is quite close to Apple.

        • Peldor
        • 6 years ago

        They are running from the impending crisis of everyone realizing that their name actually sounds more like a porn site: Go Ogle

      • Meadows
      • 6 years ago

      We’ve got to invest your next 5 years working on your humour.

        • anotherengineer
        • 6 years ago

        “humour”

        Yes!!

        Someone else that speaks the “Queen’s” English!!

          • Meadows
          • 6 years ago

          Splendid, isn’t it.

          • Milo Burke
          • 6 years ago

          i áfindan sé cwén englisc innan forgægung dolspræc, sé ealdorlic englisc sy swá béon spræcen be Æðelstán sé þréoniht.

            • Meadows
            • 6 years ago

            Silly talk my arse, take your king of Wessex elsewhere.

    • albundy
    • 6 years ago

    So what’s their angle? A large company such as this doesn’t just play name tag.

      • human_error
      • 6 years ago

      Several benefits for what they’ve done:

      – Financial reporting is clearer as they can show the revenue from their main products (advertising, android etc) separate from pure R&D ventures like the contact lenses (instead of headlines like Google revenue down or whatever it would be Alphabet revenue down etc). Yes reporting will be on Alphabet as a whole, but this also stops the questions like “why is an advertising/search company making self driving cars?”.
      – Any bad press (such as layoffs through closing a division or selling robots to the US military which wouldn’t be popular in some countries) which are not part of a Google branded effort would be attributed to alphabet and not directly to Google, reducing brand damage.
      – Extra layer of management – Page and Brin are no longer the CEO in charge of all the divisions, and would not need to keep a close eye on all the ventures if they didn’t want to – that is now the job of the individual areas’ CEOs. Normally more management isn’t necessarily a good thing but with Alphabet’s fingers in so many pies it makes sense to add another layer (or to at least shift responsibility down a level).

        • davidbowser
        • 6 years ago

        All good points. Several large companies have to run their businesses as subsidiaries to effectively compete. GE and Berkshire Hathaway both run pretty effectively like this, with Berkshire leaving most of it’s subsidiaries running with their own brand names and CEOs. Sometimes they make decisions to spin companies off when it becomes more profitable (think IPO) to run separately than as a subsidiary.

        An entire industry that runs this was is Marketing and Advertising. They have to be nimble, creative, and fiercely competitive. There are like 6 absurdly big companies globally (Interpublic and Omnicom are US based, Dentsu and Hakuhodo DY Holdings are in Japan, Publicis in France, and WPP in Ireland) and the vast majority of *small* advertising firms are subsidiaries or affiliates. The industry realized years ago that the larger the companies got, the more likely they were to become an echo chamber where “great ideas” are only “great” inside the walls.

        • superjawes
        • 6 years ago

        Basically. What would the downside be? Maybe it will be slightly more difficult to execute the “throw everything at the wall and see what sticks” strategy…slightly.

        But otherwise, that brand protection will be very good, especially if something just isn’t working and they have to nuke it from orbit. Google+ is basically impossible to kill because of the brand name…

      • NovusBogus
      • 6 years ago

      My first thought based on the capital-management part of the announcement is that the daggers are about to come out over there. Google is famous for its ‘do whatever you want, we’re profitable’ culture but all those little vanity projects are about to get majorly accountable.

      It’s also possible they’ve come to the realization that the Internet is not going to be the alpha and omega of the whole world’s existence, and want to genuinely diversify into stuff that’s more than just a vehicle for the data-mining side of the business. In a post Snowden/Heartbleed/Stuxnet/Sonypic/etc. world it’s unlikely consumers would want their car or TV connected to a website 24/7 and fully independent subsidiaries wouldn’t be able to push each other around.

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