By now, you’ve likely heard the news – after all, everyone’s been talking about it. Google’s been bitten by the reorganization bug and announced that it will operate under a parent company known as Alphabet. I know, I know, reorgs don’t exactly have the best reputation in the business world, and they’re often the result of a business that’s either seeking a way to revitalise or lacks any sort of meaningful direction.
Neither can be said of Google. It operates the largest search engine in the world, it owns the most successful video sharing site in the world, and it’s responsible for developing the most successful mobile OS in the world. At a glance, it’s the very definition of brand superiority.
So…why reorganize, then?
The first thing to understand about this reorganization is that it’s far from a radical one. Google will still exist as we know it, retaining its Search, Maps, Android, YouTube and advertising businesses. What will change is that Google will become one of several child companies alongside businesses such as Life Sciences and Calico.
The restructuring will also see Google CEO Larry Page take over as Alphabet’s CEO, with Page’s Co-founder, Sergey Brin stepping into the role of president and Eric Schmidt taking on executive chairman. Sunder Pichai will become the new CEO of Google. So….aside from a few of Google’s former departments branching out as their own companies, how exactly does this change anything?
“What you thought of as Google will just be one division inside of alphabet,” explains Josh Constine of TechCrunch. “The crazy moonshot science experiments within Google will each become their own Alphabet with their own CEOs.”
According to Constine, there are three reasons for this:
- Larry Page wants to focus more on Google’s ambitions:
- It lets Google focus less on maintaining its core business and more on other, more exciting ventures: Google as it exists now is almost entirely centered around its search engine. While that’s certainly lucrative, it takes the spotlight away from the company’s side projects – like that orbital elevator everyone was buzzing about a while back. Now, each division of the company can focus more on what it was made to do, rather than having search bleed into everything.
- It helps attract and retain talent: A lot of Google’s best talent has moved from its core ventures to stuff like Google X or its robotics team. Now, those stars are likelier to stay, as they’ve the opportunity to become CEOs in their own right and gain a much greater spotlight than they would have under the Google brand.
So…basically this is as much a restructuring as a rebranding. Google hopes that by rearranging its business, it’ll be able to make each of its core departments even better at what they do best. It’s tough to say how all this is going to play out in the future, of course…but for now, it’s time to start calling the largest company in tech by a different name.