Google, one of the largest tech companies in the world, has just undertaken a huge and unexpected re-organisation to become Alphabet, a new holding company that will be the parent of a slimmed down Google.
The announcement came from Google co-founder, Larry Page, last night. Up until then, he had been the company’s CEO, but he will now step into the role of Alphabet CEO alongside fellow co-founder Sergey Brin as President. Google’s Head of Products, Sundar Pichai, will become CEO of the new Google.
Alphabet will also be the parent company of many other smaller companies, including smart devices manufacturer Nest, health technology developer Life Sciences, and Google’s former X Labs division, the lab working on the experimental technology behind Google Glass and self-driving cars.
All the smaller companies under Alphabet will retain their own CEOs and management teams.
Google still has control over its bigger products of YouTube, Android, search and its cash cow of ads. This is fairly huge news for the Mountain View, California company.
For the past few years, Google has started to become an unstoppable force, dipping its toes in every service and product it could. They started to provide towns in the US with faster Internet connections via fiber optic cables. The more people who use the Internet, the more money Google makes.
This restructuring completely changes everything about Google, but you probably won’t notice. Keeping Android and YouTube in Google rather than spinning them out means the main portals that you experience Google outside the main Google site will not change.
The change will come to the corporate world behind Google, which nobody will notice really. The Google co-founders are now not technically running the company, meaning that it can go in directions they didn’t expect or plan for it to go.
If this new Google is “slimmed down”, whatever that slimming actually is, we may see it move quicker than it has before, bringing in updates and changes in no time, as if it was a slouch before.
If I put in my own two-cents here, I think having the safeguard of the larger company of Alphabet means Google can play around some more.
If YouTube keeps up its staggering user numbers and profitability, maybe we’ll see that span out to its own company under Alphabet. I’m surprised it didn’t happen already.
Google has done something very daring here, but it makes sense for them. The idea of Google, the small collection of Internet services you use, was getting too big, too ungainly. When did one company make a search engine and a self-driving car?
Will this be the right move? Well, minutes after Alphabet was announced, over $20 billion dollars was added to the value of Google on the stock market. So Google’s investors think this is a great idea.
All the while, you probably won’t even notice Alphabet.