The Idiot’s Guide To Google’s Change To Alphabet

The Idiot’s Guide To Google’s Change To Alphabet
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Why would one of the world’s biggest brands (Google) suddenly decide on a name change (to Alphabet)? We’re not sure either. Here, B&T takes a look at the 10 reasons behind the move and why it’s set to make the founders even more obscenely wealthy than they already are..

Are Google founders Sergey Brin and Larry Page just trying to be cool and clever with the name change?
Yes, most probably. But it’s also telling the world that the business is now far more than just a search engine company with ads.

Does Google the search engine remain the same?
Yes, you’ll still Google stuff and still get that funny white search engine box with the daily updated cartoons. And no, you won’t be seeing Google branding replaced everywhere by Alphabet.

“I should add that we are not intending for this to be a big consumer brand with related products — the whole point is that Alphabet companies should have independence and develop their own brands,” Larry Page said in his announcement of Alphabet on Monday.

Is it all about avoiding tax like some people have suggested?
Possibly. Google’s been busted in Australia and elsewhere for not paying its fair amount of tax. There has also been calls for the company to be broken up as – in many parts of the world – it’s a monopoly and destroys competition.

Google’s famed motto is ‘do no evil’ and the new holding company may be a way of showing it’s listening to its critics without doing much of anything, really.

Is it about world domination?
Very probably. Despite being worth $US455 billion and barely 15 years old its squilionaire owners – Page and Brin – say they’re only getting started. Google the search engine will be only a small part of a much larger corporation.

The company still likes to act like a start-up
The last thing Google wants to appear as is stuffy and corporate, and that’s despite being one of the biggest brands on the planet. According to Andrew Birmingham, editor of B&T’s sister tech site www.which-50.com, Alphabet is merely a holding company for Google’s many divisions.

“Does the name change matter for the shell at the top of the structure? No, not really,” Birmingham said. “Does the structural change matter? Yes. Structure and culture are inexorably intertwined and too often companies mistake one for the other. Google’s rationale is simple enough. According to co-founder Larry Page ‘This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.’

“Google is the world’s largest and oldest startup and its ability to operate at scale and at speed is the quality that describes its remarkable success. This newest move seems designed to maintain that status,” Birmingham said.

Alphabet will be responsible for all the goofy stuff
On top of its search engine and ad platforms the Google team produce some pretty way-out ideas. Think driverless cars, Nest (its smoke detector arm), its robot division, while there is a big move underway presently into health products (think contact lenses that treat diabetes). All these brands will fall under the Alphabet umbrella and will possibly not tarnish the Google brand if and (possibly) when they tank (see: Google Glasses.)

It’s to attract top talent
Not that Google’s ever had a problem collecting potential CVs but with EVERYBODY now wanting data scientists and programmers Alphabet’s going to have to fight (see pay big money) to retain talent.

When the core part of the business is programmatic, algorithm-driven click ads that may work to turn potential employees off. As one scribe wrote on Alphabet’s announcement: “Plenty of people have speculated that Google’s moonshots (harebrained ideas), while sincere and admirable, are also a cynical recruiting device for wide-eyed young engineers.”

It’s to placate Google investors
Not to get bogged down in tedious financials, but Google has core (Google ads) and non-core (driverless cars) parts of the business and the name change will bring clarity.

As Fortune magazine wrote on Monday: “For all its ‘moonshots’ Google fundamentally remains an advertising company. Should the future Alphabet decide it wants to ditch, separate, or create new capital structures for any of its non-core businesses, the new division will facilitate matters.”

It’s about management succession and restructure and Google
Google co-founder, Larry Page, returns as boss of Alphabet. Industry insiders argue it’s so he can keep eye on his division heads who are allegedly prone to squabble and fight for the few top exec positions at the company. It also means Page can ensure that only technical executives get elevated to the top jobs.

It’s about diversifying the business
As any top CEO knows you don’t put all your eggs in the one basket. Take Facebook, it now makes more money from WhatsApp and Instagram than it does from its social media portal. As one commentator said when it comes to these tech behemoths: “Betting on your one core business, no matter how profitable, is risky. Just ask Microsoft, which has suffered as the internet has eaten into its Windows business”

 

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