Google Alphabet Announcement Surprises Many; Experts Say Move Makes Perfect Sense
Google announced last August that it would restructure into a new holding company called Alphabet. The announcement, made through a surprise blog post by co-founders Larry Page and Sergey Brin, highlighted the move to put a collection of companies, including Google, under a new one. They also announced a shakeup in management, handing the reins of the search engine business to Sundar Pichai, Google's new CEO.
The Google Alphabet announcement surprised many people in the tech industry, but according to an article by Adam Lashinsky of Fortune.com, this shift is for clarity. With more and more businesses coming under the Google umbrella, differentiating between core and non-core segments is easier under one holding company like Alphabet.
In recent years, Google added prominent products and services like Android and YouTube, as well as other departments focusing on R&D. These departments are now spun-off into different sub-companies under Alphabet. CNN Money outlines its structure, including putting Google Glass, driverless cars, and drone delivery under the Google X lab, as well as creating independent Alphabet companies for Google Ventures and Google Capital.
This move allows Google to expand its brand and contain all of the projects and companies acquired throughout the years. Google, the search engine remains as it is, while allowing Alphabet, the company, to expand further and not just focus on Internet services, Venturebeat explains.
This way, Alphabet can make more moves in the future, like more acquisitions, investments, and research on future products without risking the Google brand. In a way, the people behind Google can actively pursue new ventures no matter how risky it is, without putting Google's name on the line.
The Google Alphabet announcement initially surprised the world, but experts say that in the long run, it will be clear that it was a calculated move to expand the business, not just for Internet-related products or services, but for anything that piques Google's interest.
