The web woke up yesterday with tremors comparable to a continental shift. Until now, Google’s main services were what identified the company and exposed it to the public, but that has changed. The masterminds of Mountain View activated a restructuring plan that shapes Alphabet, a new “umbrella company” that establishes a clear separation between Google’s traditional services and its high-profile mega-projects.
Any change of course causes concern and uncertainty, especially when it involves a multinational corporation with billions of dollars under its wings. On one hand, there are those who enjoy stability, security, and the money both generate. On the other, we find the bearers of new, risky, and radical ideas with gigantic potential. In recent years, we’ve seen several examples from Google:
- Internet for everyone
- Fiber optic connections
- Self-driving cars
- Eternal life
- Wearable devices
- Advanced robotics
All of this contrasts sharply with more everyday aspects like ad placement, online searches, cloud storage, and mobile devices. Google has worked very well as an amalgam; however, its founders Larry Page and Sergey Brin concluded that it’s a good time to separate things. Welcome to Alphabet.
A New Corporate Structure
It’s important to note that Google will not lose its identity; only its current role will change. Instead of keeping the old profile of “parent company”, Google is now a subsidiary of Alphabet. Within Google’s perimeter we find the search engine, the entire advertising structure, Google Maps, YouTube, and Android, while Alphabet’s responsibility extends to Calico (biotechnology, anti-age), Nest (home connectivity, Internet of Things), Google Fiber, the investment divisions Google Ventures and Google Capital, and finally the lab Google X with all its experiments. Larry Page and Sergey Brin will be respectively CEO and president of Alphabet, which opens the CEO position at Google. That position will be in the hands of none other than Sundar Pichai, the number one of all Google products until now, and one of the best resources Mountain View has in its ranks.
Why the Change?
Now, we are obliged to ask ourselves a question: Why? Why would Google, at the top of its game in many markets, initiate a restructuring process with these characteristics? There are many possibilities to consider. Some believe the new format better represents the company’s growth in recent times. Others think it’s a signal to Wall Street, constantly worried about money invested (and lost) in extravagant projects. Then there’s the theory that Google needs to become Alphabet to compete with Tesla, which keeps amazing the world with superbatteries, electric cars, and open patents. Finally, we arrive at the “boring” option, which is becoming an attempt to be more compatible with antitrust laws in certain markets, including the European one. In the immediate term, users should not notice any drastic change, but from a certain point of view, Google became another product of Alphabet, and we wouldn’t be surprised if modifications are carried out according to its new status.
