Since its inception as a lowly search engine contending with the likes of Yahoo and Ask Jeeves, Google has grown inexorably to become the monolith it is today. Now, it has been announced that Google has created a new parent company called, wait for it, “Alphabet”.
Why Alphabet you ask? Well according to founder Larry Page it’s for two reasons: the first because the term “Alphabet” represents language which is “the core of how we index with Google search”. The second, and probably more accurate reason, is because the definition of the term Alpha-bet is “investment return above benchmark” which is what Page says Google “strive to do”.
It’s not uncommon for companies that start out small to eventually create new divisions and names throughout the years, especially those that branch out from their original offerings which Google has done dramatically over the years. In a blog post Page wrote: “This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.
“Our company is operating well today, but we think we can make it cleaner and more accountable. The whole point is that Alphabet companies should have independence and develop their own brands.” Under the new structure, Google will consist of some of the company’s most well-known products including YouTube, Android and of course the search engine itself as well as Apps.
Going forward, Alphabet will be the umbrella name for the company and under its remit will also host Google’s more “progressive” projects including their smart home technology Nest, its drone program and, unsurprisingly, its R&D departments.
However, even though Mr Page claims the reason behind the company’s restructure is to improve the business’ workflow, the truth is there are also financial implications. Speaking to the business magazine Bloomberg News, BGC Partners’ investment analyst Colin Gillis said: “There’s been a lot of speculation about how much money they put into these other ventures. That will come to an end. This also gives them the structure to add in another business line if they were to acquire something. The mechanism is in place.”
As Google is not one to shy away from expansion the fact that the company has restructured isn’t a massive surprise; however could this be just the beginning? It’s likely the technology giant has a long-term plan for Alphabet, so it will be interesting to see what other announcements the company makes over the next few months.
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