Google’s audacious plan for growth and pioneering new frontiers has prompted it to consider rebranding itself. So, in the not too distant future, Google will be perhaps better known as “Alphabet”. The stock market seemed to welcome the notion of expanded growth and innovation. They digested the unexpected news from Google which announced after the close Monday that it will become part of a new publicly traded entity called Alphabet. As shares will still trade under the tickers GOOGL and GOOG. and the company assured the public that though it will become a subsidiary of the new firm, Google will retain all its features and uses, both classes of the stock jumped more than 6 percent in after-hours trade.
When the massive reorganization is complete, Google as we know it today will be a part of the new holding company Alphabet which will continue the path of co-founders, Larry Page and Sergey Brin, in developing various new ambitious digital ventures. This reorganization will see the passing of the CEO torch from Page to a relative newcomer, Sundar Pichai.
Though its beginnings were as a search engine, Google has been more than that for a long time. Aside from creating many popular and utilitarian internet products, along the way it assimilated companies such as YouTube, Android and Gmail into the family fold. They have made news most recently with forays into ventures such as self-driving cars, anti-aging technology, and internet signals from space delivered by balloons. Alphabet, then, is a natural progression for a company that has grown beyond the confines of a single company to be managed effectively. Different strategies and technologies require different types of leaders to continue to be independent and innovative, hence, the move toward Alphabet.
“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes,” Page blogged recently in announcing the shift. “But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.” Like many founders, Page and Brin are more excited about launching new ventures than they are about managing existing ones. The new structure will allow them to periodically create new projects and then hire others to handle day-to-day operations. But they are loathed to become just a conglomeration of a brand with related products- such as a Unilever in the food industry.
So what will the new structure look like? From the vantage point of a shareholder, Alphabet is just the new name for the company that used to be called Google. Some people might recall that before Exxon, it was Esso, but it is still an oil giant. Google shares will become Alphabet shares, and existing shareholders will continue to hold a stake in all Alphabet companies. What about us- the users. We have been assured that in the short run, nothing will change for us – we might not experience anything different. Most of the most popular Google products we use every day will stay under the Google umbrella and will continue operation as usual.
But an intriguing project, dubbed Calico, a human longevity project which hopes to extend human lifespans, results might not pay off for decades and thus a user or stakeholder may not see or feel anything different for perhaps a decade. On the other hand, some things may come to fruition sooner. Still, it is unlikely to dramatically affect the casual Google user.
Let’s hope that governments allow Google…er, Alphabet, to continue to freely innovate without the spectre of over-regulation in the guise of promoting freedom.