A lot of people were surprised when Google co-founders Larry Page posted a blog entry a few hours ago announcing that Google would henceforth be a subsidiary of a new company, called Alphabet. No, it was not a takeover – Alphabet is simply a new collection of companies headed by Google founders Larry Page and Sergey Brin, and Google was one of them (and the largest too). The core idea of Alphabet seems to be to take the pressure off the Google brand and to sharpen its focus – Page says that Google is now a bit “slimmed down” with some of the businesses that had been previously associated with it (although “pretty far afield of our main Internet products,” as he put it) moved to Alphabet.
The rationale? Well, Page writes on the blog:
“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business…”
Interestingly, the man who has been handed the reins of CEO at Google is the man who was in charge of Android, Sunder Pichai. It is clear that he will now have a bigger role to play in the company even as Page and Brin appoint other CEOs for other businesses, most notably Life Sciences and Calico. The message from Alphabet seems to be clear – G is for Google and it will be looking at our core Internet products.
Which just makes us wonder that if the Google co-founders were already in restructuring mode, could (should?) they have not just taken another leap of faith and made Android a separate entity too? Yes, we know how closely Google is linked to Android, but the fact is that given the problems the OS has been facing of late (as showcased by an infographic which showed the extent of its fragmentation and went viral) and the moves to breathe new life into the Android One concept, would it not have been better to simply put the Android egg in a non-Google basket?
For, make no mistake, notwithstanding all the talk of a leaner Google and better managed businesses, Sundar Pichai will have his hands royally as Google CEO – Chrome, Chrome OS, Android, Search, …the list is a mighty one. No, we are not doubting the man’s ability in the least, but surely if the idea of Alphabet was “to keep tremendous focus on the extraordinary opportunities we have inside of Google” (Page’s words from the blog), then this was perhaps an opportunity to move Android away from Google, a bit like YouTube is. It certainly would have given Android the kind of clear focus and constant momentum that the OS needs, instead of its current start-stutter state where it attracts attention only when a new version is announced and when updates are not delivered on schedule.
All said and done, we think Alphabet is definitely a very good move in the strategic sense, as it moves (pun intended) Google away from a number of businesses and activities that might have proved distracting. However, we cannot help but feel that a slightly more dramatic restructuring could have been done. Maybe it will happen later, maybe Alphabet is just the beginning of a more segmented approach by Messrs Page and Bryn.
We like the idea of G for Google as part of the new Alphabet. But what about A for Android?