Many were caught off-guard yesterday when Google announced it was restructuring its organisation, creating a new company called Alphabet of which the Google we know is becoming a subsidiary.
However, Dan Robathan, general manager at digital agency Deepend, said it makes perfect sense for the tech overlord.
“By separating out all bits of the business that don’t focus on the internet it will mean Google can return to its original purpose of owning that space,” he told B&T.
“It will allow the more diverse areas of what was Google, health and drones etc mentioned in Larry’s post, to be more agile and set their own agenda. Alphabet gives them a licence to keep changing the way we live without any risk to their core business. It makes perfect sense.”
As reported yesterday, co-founder of Google Larry Page announced the company restructure via a blog post, explaining the new Alphabet as a collection of companies, of which Google is just one of them, albeit a big one.
“This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead,” he wrote.
“What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity).”
There’s a number of reasons why Google would do this – of which we look at 10 of them here – and Deepend’s managing partner Chris Crammond echoed Robathan’s sentiment that it’s in Google’s nature to do something like this.
“It’s reflective of their increasing diversification and the need to have specialist management across what are now very different business units,” he said.
“They have spread pretty far from their original search focusesd business, investing heavily in areas like Health Sciences, Drone delivery services and even a Broadband arm; all of which operate in completely different competitive environments.”
This change is going to be the first of many, reckons Jared Woods, social media lead at communications agency History Will Be Kind.
“Splitting out their experimental and B2B services from more consumer and social offerings can only make it easier for customers to interact with the platforms,” he said, “and by extension, for Google to concentrate on a range of strategies without becoming weighed down in building an omnimarket solution.”