ABC of Google’s Alphabet
Google has become a household name in the tech-savvy world of today. However, there is an unexpected change that the leaders of the tech giant sprung upon the unsuspecting public recently. The company is no longer an independent entity but is one of the many child companies of the newly formed Alphabet.
Alphabet is an umbrella firm that would contain all the diverse businesses that Google has been involved in. The idea here is to slim down the tech giant and allow its leaders to focus solely on the technical aspects of search, Android, and YouTube.
While this is by no means a farewell to our much-loved Google, it does mean a lot of restructuring on the part of the firm. Let’s take a look at all that has changed and all that remains reassuringly the same.
The Internet Search Engine Remains the Same
Despite the new Alphabet that is going to change the ABCs of Google, the average consumer would remain largely unaffected. There is no reason to start learning a different internet jargon, the trusted Google.com that brought you all that you needed in a jiffy would remain the same. Even the most visited sites associated with the company like the YouTube would remain unchanged.
The idea behind the change is to allow Google to focus exclusively on improving the user experience and confusing its loyal customers with new names and jargons is definitely not on the cards.
Alphabet is an Umbrella, Housing a Multitude of Independent Entities
Google might be the biggest search engine, but that was by no means the only facet of the company. Apart from its technical endeavors the firm was also active in revolutionizing the world with things like driverless cars, drones, contact lenses for diabetic patients and research into increasing the lifespan of us mortals. These are ambitious projects indeed and were eating into the resources of the firm.
The new Alphabet now houses all these separate divisions under its protection while Google is free to focus entirely on the technical functioning of the firm. Calico, Nest, Fiber and Google X are some of the spin off firms that would have their own CEOs to manage them better.
There is a Change in Leadership
Larry Page who used to be the CEO of Google would now be at the helm of Alphabet the new parent company. The mantle of being the Google CEO has now shifted to Sundar Pichai who had been the heading the Android division of the firm earlier.
Larry Page was all praise for the new CEO and commended him on his business talk which he called as good as, if not better than his own.
The Name “Alphabet” and What it Signifies
The founders of Google chose the name Alphabet after a lot of deliberation. It has two interpretations; the first one is the obvious one wherein Alphabet signifies the collection of letters which create a language, the most important innovation of mankind.
The second connotation is slightly more subtle where in Alpha stands for a higher than benchmark return and bet is just that a bet. The cheeky name reflects the groundbreaking work that the firm would be involved in.
Google Shares will now be Alphabet Shares
There are those of us who own stakes in the tech giant. Google shares would soon be traded as Alphabet shares. While this might sound like a big upheaval, the fact is that all the shares that you currently own from Google would just quietly be renamed to Alphabet.
Neither the number nor the value is going to be affected here. Even the GOOG ticker remains the same for the time being.
Google Just Got $20 Billion Richer
The birth of the parent company for Google has allowed the tech giant to increase its overall market cap by 6%. This might not sound much independently but convert it into numbers and you have a whopping $20 billion rise in the value of the company.
The Google Hardware in the Markets Remain Unchanged
If you are expecting new Alphabet Nexus phones and Alphabet Chromecast streaming sticks then you are going to be disappointed. Alphabet is an umbrella that will house a number of brands under it, without becoming a giant brand itself.
The idea here is to allow each child company to flourish individually with capable leaders at the helm of all the firms. Google hardware would be the same and would thankfully work the same as well.
Google’s Financial Results Remain Separate
As an investor it is natural to be worried about checking the quality of your investment if things do not work out and the various child firms under Alphabet spin off as separate entities. The founders of the new company recognize this.
Alphabet would be publishing separate financial statements for its various business segments. This would ensure that Wall Street remains happy despite the change.
The Movers and Shakers of Alphabet
Larry Page would head the parent company in his role as the CEO while Sergey Brin would be its president. The child companies would have their own leaders at the helm.
Arthur Levinson would be the CEO of Calico the arm of Google that is working on increasing human longevity.
Tony Fadell would head Nest the smart home devices arm of Alphabet. Craig Baratt would head Google Fiber, David Lewee would head Google Capital and Bill Maris would head the Google VC arm.
YouTube and Where it Fits in the New Scheme
This could have been an opportunity for the Alphabet founders to separate YouTube as an independent business as well.
However, they have prudently realized the strong connections between Google as a search giant and YouTube. For now, YouTube and its CEO Susan Wojcicki remain under Sundar Pichai and his Google executive team.
Alphabet looks like a change in the positive direction that would not only help Google’s erstwhile revolutionary businesses to flourish but also allow Google to perform better in the space that it knows best which is the internet search arena.