Why Google Transformed into Alphabet

google alphabet
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Written by BusinessAlligators Support

Support Staff at BusinessAlligators is a team of business experts led by Shilpi Singh Trusted by over 100K readers worldwide.

March 8, 2016

Google was never a conventional company and it never will be, as cited by Sergey. From starting of Google till date Google amazed everyone with its creativity and uniqueness. On 11th August 2015, Google announced itself as a subsidiary company of a new holding firm called “Alphabet”. This Google Alphabet conversion added a new chapter in the history of Google. Larry Page, now CEO of Alphabet (Google) says that they named it as Alphabet because Alpha – Bet, alpha means investment return above benchmark and which they strive for and another reason is that it means collection of letters which represent a language, one of the humanity’s most important innovations and it is they index with Google search.

Now the question arises why Google Alphabet conversion needed? Following are the reasons why there is a titanic shift in the company structure.

1. Rebranding

Google now no longer just a search engine. As explained by Page, the goal is not to be a consumer brand with a bunch of related product. The whole idea of Alphabet is to have total independence and develop their own brand. As the YouTube CEO Susan Wojcicki runs it as an independent brand. This will give new horizons to explore. Have you ever wondered why WIPRO Ltd is having sunflower as their logo? It’s because the WIPRO is the abbreviated form of “Western India Palm Refined Oil Limited”. Yes, WIPRO earlier used to be in refined and vegetable oil business. In the leadership of Azim Premji, it had become giants in IT, infrastructure, and customer care and is still growing on. Likewise, Google is now expanding at an extremely fast pace and hence they need a name which will define what they are, not just a search engine which hence we got Google Alphabet rebranding.

Related- Most Famous Google Mergers and Acquisitions

2. More Focus

Google aim was always to organise the world’s data and now they are moving to more desperate lines of business. They are now focusing on earning money not only by search ads but with their products which will change the life. For this, they need more focus and should concentrate their resources to more accurate than before. Team structure should help them grow in their own manner. You cannot expect to get highest revenues from R&D and hence every part of the organisation needs proper focus and resource. Now Google is into making driverless cars, beaming internet signals from giant balloons, delivering high-speed internet access and extending human lifespan.

This they cannot achieve by being a search engine, it a whole lot new concept, overall a new path they had started to follow and hence with a new name which is more apt than ever, this was a major reason for Google Alphabet transformation.

Related- How Google Started

3. X-Projects

Nest the ambitious acquisition by Google which works on the smart home of the future. It was a whopping 3.2 million USD deal. The Google fibre is already launched in three cities and they are planning to expand in six more. Contact lens which will monitor your blood pressure, heart beat rate and pulse rate, still the research is going on. Many more projects are in pipeline. These projects are not liable to Google now as it is now a different entity. As nicely said for Page and Brin, they are inventors first and entrepreneurs by default. Their ambition of doing the impossible was never out of their sight so Larry Page stepped down from the post of CEO of Google to get the more amorphous role of Alphabet CEO.

Related- Google 1st Downfall

4. Stability and Accountability

The duo (Larry and Brin) were always more interested in handling more projects than handling day to day grind of running a company. They had started discussing and working on giving Google a new face and exploring its options four years back. The most important asset of Google is its user trust. Google accountability is always the plus point for the brand. Now as Google had acquired many vague companies, they had to secure their brand name and maintain their name in the market as earlier after any failure. As it happened with Google Glass, it was bearing the name of Google and its failure had harmed the brand value in the market. Giving Google an umbrella company is a very clever move which will benefit the company its user and their investors.

Related- How Google Makes Money

5. Accurate Scale of Opportunities and Resources

The current structure of Alphabet offer more slots for new ventures to grow potentially and securing the name of its biggest money maker player Google. After acquisitions, biggest problem a company faces it to indulge them in their current system which sometimes turns out to be a real mess. As it happened with Capgemini after acquiring IGate, they lay off 10% of the employees and many other left the firm. The biggest challenge is to retain the talent because of which you had acquired the business. The resource should see their growth and opportunities. So a company which make small satellites does not bother about the ads and no flying balloons, they have their environment and they will grow. The motive behind the restructure was to avail this environment to the talent Google is holding. Measuring the accurate resource and letting them build their own market individually.

The nutshell of Alphabet (Google) structure:

  • CEO: Larry Page
  • President: Sergey Brin
  • Executive Chairman: Eric Schmidt
  • CFO: Ruth Porat
  • Chief Counsel: David Drummond

In jest, Google had acquired many ventures and it definitely planning big and it’s going to be Google Big. After the rebranding, the share of Google increased by 4% in a day. All the diversified business cannot be easily handled under one company name. The shareholders need the more transparent overview of the company which now alphabet can provide. All the necessary steps were taken by Google to play big now only time can reveal the plans and what alphabet is capable of doing. Lastly, as the name suggest the website for alphabet is abc.xyz.

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1 Comment

  1. ashraful

    thanks for the information…


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