Late last night Google ceased to simply be Google.
Since their inception, Google has been the all encompassing company that has attached its name to everything that Larry Page and Sergey Brin have put into motion. From the start, when they put together the most successful search engine, through to today where they are working on healthcare devices and self driven cars.
However, in the eyes of many this did not make a great deal of sense, including Brin and Page themselves. So although it seemingly came out of nowhere, the open letter from Larry Page outlining the rebranding to ‘Alphabet’ should not have been a surprise when you look at everything that the company has been doing.
For instance, when you look at the ways in which they have allowed their employees to innovate with 20% of their time, it becomes clear that having some delineation between the core of the Google business and the other things being done is necessary. Their Xlab, for instance, has brought forward many new innovations, but may have been limited through operating within the Google brand.
Alphabet will allow the companies incorporated within it to work independently of one another, whilst still having the support of Google. It will give them a level of buffer and also give them a certain level of responsibility to run each business as efficiently as possible.
In addition to this, it also gives them the chance to utilize their investment arm, Google Ventures, and bring companies into the Alphabet fold. It will therefore mean that companies can be more easily integrated into the overall Alphabet company portfolio, rather than becoming a division of Google. In fact, their investment portfolio includes companies starting with every letter of the alphabet, which shows the scale of investment from the company. Google Ventures have invested in or bought around 280 companies so far, which makes them one of the largest technology venture capitalist companies in the world.
Away from simply investing and owning companies, the restructuring has a significant impact on the digital scale of the company too.
Rather than needing to oversee everything from the technicalities of search algorithms through to the requirements of a self driving car, Larry Page is going to take the position of CEO of Alphabet, allowing Sundar Pichai to take control of a slimmed down Google. The company will focus on the core principles of the original company rather than using it as an umbrella for everything being done.
It will mean that innovations within each element of the business will come from dedicated leaders for that particular company with those specific skill sets. Sundar for instance, was senior vice-president of product at the company, giving him the key skills to push the search element of the company forward.
The reality of this restructuring will actually do little to change the way that people interact with Google though, and you will still search using it, send emails on Gmail, and use the maps service to navigate. What it will simply mean are more siloed and focussed companies working within the Alphabet framework. This is likely to see an increased number of innovative products and diverse ideas coming from the company, meaning that the next few years may well bring some of the most exciting digital offerings from the company.