Google Inc. is now a subsidiary of Alphabet Inc. Huh? What? Well, until today we’ve always known Google as a single massive tech company that began delving more and more into new projects and ambitions. With that, over the years Google has acquired many companies. Some of these companies were aquired because Google believed that the businesses themselves would be profitable and beneficial, such as Nest, and others Google acquired to integrate them into other Google properties.
Today, Google has announced a number of massive changes to the company structure. The largest change is that there is now a new Parent Company called Alphabet Inc. Formerly, Larry Page and Sergey Brin were CEO and President of Google respectively. Now, they are CEO and President of Alphabet Inc. respectively. Sundar Pichai is the new CEO of Google.
Beyond that, several projects/teams that were part of Google are now being separated from Google and being treated as standalone businesses under Alphabet Inc., such as Google Auto, Calico, Google Ventures, Google Capital, Nest, and more.
Ultimately, if this makes Alphabet look like a big collection of companies, that’s because it is. The idea here is that investors have been worried about Google’s “moonshots”, so with this new structure, it allows investors to rest easy in the core Google business, and the other projects/companies can receive funding without having to justify themselves as being “google products”, thus adding a lot more flexibility.
As for why the name “Alphabet” here’s what Larry Page said: “We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive for!”
To read the whole post that Larry Page wrote about the new changes check out Alphabet’s wesbite at https://abc.xyz/
Overall, this is a big change for the company, and I kind of wonder what direction this will go in eventually. What comes to mind for me is Samsung Corp. Samsung is also a giant collection of companies, but doing so has actually created some problems for the company. The most recent example being their disconnect between the mobility division and the division that develops the mobile processors. It’ll be interesting to see what the future holds for Google and Alphabet.
What do you think of this massive change? Do you like the name Alphabet? Let me know on the comments below!
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