In a sudden and bizarre marketing move, Google announced a change of the company’s structural landscape with the launch of a new parent company, Alphabet. The brand’s architecture is poised for change with this announcement and has indicated significant changes in the management and organization of this tech giant.
This move comes at an unexpected time, as in today’s world Google has become more than just a brand synonymous with innovation. So what exactly does this corporate reorganization entail and what is going to happen to Google now?
The division of a brand
As of current updates, it has been declared that the core media and advertising businesses such as Google Analytics, YouTube, Android and Google Maps will continue to fall under brand Google. But Google itself will now be placed under the umbrella brand, Alphabet, which will house the diverse and experimental businesses such as Google X, Nest, investment ventures etc. With this move, the corporate aims to allow the individual companies to gain visibility and allow unique brands to grow independently. The primary structure is designed as such to give scope for each of the business arms to grow into their own signature brands.
While many experts seem to think of it as a brash move, many others seem to believe it may be the best thing Google has done so far. Positioning itself as an idea incubator, the structure and announcement of Alphabet is being understood as a declaration that is paving a path to allow lots more innovation to come into the world.
While the media-related businesses will continue to function under the Google name, Alphabet will attract investors and analysts towards the more innovation-driven companies with a promise of transparency of finances, expenditures and strategic plans for experiments and product development. This will allow Google to continue on its climb while Alphabet can focus on newer projects as well as others, which did not take off too well such as Google Glass.
A move to propel innovation
As the transition begins to slowly take place, Google co-founders Larry Page and Sergey Brin will move into the roles of Co-CEO and President of Alphabet respectively, while previous Senior VP of Products, Sundar Pichai, will take office as Google’s new chief. Pichai has been with the company since 2004 and earlier headed the development practice for Gmail and Google Maps. He then headed the launch of ChromeOS and was also put in charge of the Android OS. This move makes him one of the new bosses at Google.
This approach makes it evident that Google does not want to lose steam in the innovation sector and will continue to develop as a media brand and a modernization-driven company simultaneously. In the blog post announcing the shift, Larry Page wrote, “Google is not a conventional company. We do not intend to become one.” It couldn’t be clearer that it is their intention to continue evolving, ideating and innovating.
So what does this mean for Google? The move only makes it evident that Google can now continue to focus on its core advertising and media practices without getting distracted by the need for new developments and inventions thus preventing any possible failures with an already successful brand. This means that it can singularly focus on the advertising offering and make significant improvements to the technology that half the world is already hooked on to. The idea is that Google is going to come out of this stronger, more powerful and better than ever.
Investors and analysts, who previously felt that the bundled up businesses were becoming difficult to evaluate as the expanse began to grow, now believe that the ventures can be observed independently. They also believe that adequate support can be provided to the sectors that need it most while propelling the development of new ideas.
The birth of a new giant
While it is too early to say how this will affect the stock market, the response so far has been positive at least in marginal quantities. And with greater transparency in both businesses in terms of cash flows and investments, performances will be impacted with increased accountability and discipline. Through the divided operations the team hopes to show investors that their primary source of revenue i.e. Google, remains stable and highly profitable while giving them a chance to chase after moonshots. This indeed seems to be a positive promise. Investors hope to see a surge in business indicated by this move and support Alphabet in its rise to become a leading company that is at the forefront of technological development and innovation. Interestingly, the company will not own the domain www.alphabet.com, which has been taken up earlier by another entity. It has instead settled for https://abc.xyz/.
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