Google have restructured their company, and the name Alphabet has popped up. Google have always been a company that moves between industries and doesn’t have one focus. Google has been a company involved in as much as it can, being a search engine, an email service, online office apps, mobile OS, self-driving cars, mapping Earth and Mars, Google Glasses, a range of other things and quite likely a bunch of stuff the public doesn’t know about yet.
It’s not easy for any company or person to spread themselves so thin. Imagine being a parent in the care of 20 children. It’s not easy and some things would end up missing out. Steve Jobs from Apple let Larry Page (Co-founder and CEO of Google.) know that the company was attempting to take on too much. Page’s thoughts on this from the Financial Times suggests that Page would not be happy if his company didn’t try to do as much as possible.
That’s where Alphabet comes in. Alphabet will be a holding company and Google’s products will become subsidiaries of Alphabet. That means that YouTube, Android mobile OS, self-driving cars, The Loon Project, Nest connected home devices and the massive revenue maker for Google, it’s ad-related businesses, will no longer be Google but subsidiaries of Alphabet.
What does this mean for Google’s users? This is a change from the plan of getting all users to have a Google + profile to connect Google’s products together. Perhaps Google learned that the bigger the company, the more fingers that a company has in the pie, the less trusted the company becomes. Google wants to be a long term success with the claim it wants to make the world a better place. The long-term success part of that line makes sense, but the want to make the world a better place is cringe worthy. Every tech company seems to want to make the world a better place, and that seems like an empty statement. Is the world a better place with Google being in so much control?
Google moving to Alphabet as a holding company and making their projects subsidiaries of Alphabet appears to fracture Google. The parts that make up the company will seem different, outside of Google. It could change people’s perceptions of the company. For example, if one subsidiary has a public relations issue, it won’t drag all the projects through the mud. Google’s Glasses project seemed like a failure that is connected to other projects Google take on. The more Google has their name on projects that fall the more questions are asked about Google’s other projects. By branching out into different subsidiaries, Google’s branding isn’t connected in such a tight way.
What happens for Google and its services with this restructuring will only be known in time. To be successful, the spin-off companies, subsidiaries and emerging technologies would have to be successful. The ideas are there, and there are a lot of good ideas. Whether or not they’re successful will be interesting. A product could be great, exactly what users want, and it could make the world a better place. Something like the Loon Project could give affordable internet access to more people across the globe, connecting them to the world outside of their local lives. However, if the Loon Project doesn’t make enough profits, shareholders won’t be happy.
The view of what makes the world a better place is different, depending on if you ask shareholders or users. Can Alphabet make the world a better place? Can Alphabet continue on with Google’s dominance? As a company, Page and Sergey Brin have made a decision that will have to be followed through with, that isn’t easily turned back from. Becoming a conglomerate, like other tech companies before, will be a new challenge that is far from easy. Google, Page and Brin will likely lose control of the subsidiaries and have to hope the spin-offs can make decision, devices and products that grow Google, Alphabet and the other subsidiaries.
Google’s customers have become used to free products, given in exchange for advertising and gold bars in the form of personal data. Perhaps part of the reason for splitting off products and services, and emerging technologies has to do with trust. Google is losing people’s trust quickly. In Europe, the fight against the right to be forgotten is a fight against something many populations want. For people growing up, they have the unfairness of what they said as a 13-year-old online to follow them their lives. Something other generations haven’t had to deal with.
What Alphabet will mean to the world that is connected via Google devices and services will remain to be seen. What the reorganization means for investors will have a different answer. What it means for Google itself will be interesting to watch.
Related Links: MIT