Google announced a huge company restructure this week, establishing themselves as a subsidiary of a new parent company named Alphabet. Google co-founders Sergey Brin and Larry Page will serve as President and CEO of Alphabet, while Google head of product Sundar Pichai has been appointed as the new Google CEO. And provided that Google can clear numerous potential legal hurdles, we’ll likely be hearing a great deal more on Google’s new holding company in the near future.
In a blog post explaining the news, Page outlined how the restructure will make the “slightly slimmed down Google” more accountable. He explained that Alphabet is a collection of companies, the largest of which is Google, with companies “pretty far afield” of Google’s main internet products being shuttled under Alphabet’s umbrella.
“Alphabet is about businesses prospering through strong leaders and independence,” Page wrote. “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, and we’ll determine their compensation.”
The Google business will remain in command of features including search, ads, maps, Gmail, YouTube, Android, and the related tech infrastructure, while branches including its health and investment efforts, such as Ventures, will move to Alphabet. This will allow the subsidiary companies to experiment freely without tarnishing the Google name in the process (the failure and prolonged death of Google+ comes to mind).
“The whole point is that Alphabet companies should have independence and develop their own brands,” he wrote. Alphabet, he continued, isn’t meant to be a consumer brand unto itself. “For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for! I should add that we are not intending for this to be a big consumer brand with related products—the whole point is that Alphabet companies should have independence and develop their own brands.”
In light of Google’s announcement, it’s time to take a closer look at Alphabet, particularly the major brands under the company’s umbrella.
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Run by Sergey Brin, who co-founded Google and will also serve as president of Alphabet, Google’s secretive ”moonshot” lab is devoted to building the tools of the future in million-to-one scientific ambitions that require enormous amounts of capital and risk-taking. In its Star Trek-level conceptions, the company aims to come up It has incubated highly publicized projects such as the self-driving car, Google Glass, a drone delivery service called Wing and the Fiber internet service provider.
Nest
When former Apple engineer Tony Fadell built a vacation home, he was unimpressed with available thermostats and other security systems on the market. In his quest to design a better alternative Nest Labs was born, and has since expanded into an all-inclusive smart-home product source. Google bought the connected-home company for $3.2 billion in January 2014, and it will serve as a subsidiary of Alphabet in the restructuring.
Calico
Calico’s core mission is simple and universally appealing: it wants to create the fountain of youth. Formed in 2013, the R&D company is headed up by Art Levinson – 14 year CEO of biotech company Genetech – and utilizes advanced technologies to increase our understanding of the biology dictating the human lifespan. Through development of age-slowing developments and tools to fight age-related diseases, Calico is helping people to lead longer and healthier lives.
Sidewalk
Founded in June 2015, Sidewalk Labs aims to foster the development of technology products, platforms and infrastructure that help improve life in cities around the world. Led by former Bloomberg CEO Dan Doctoroff, the New York-based company will implement technological breakthroughs to solve urban problems, tackling issues like cost of living, transportation, reducing energy usage and more.
“The biggest challenges that cities face — such as making transportation more efficient and lowering the cost of living, reducing energy usage and helping government operate more efficiently have, so far, been more difficult to address,” the company said in an announcement. Doctor has said that Sidewalk “will play a major role in developing technology products, platforms and advanced infrastructure that can be implemented at scale in cities around the world.”
Ventures
Founded in 2009, the venture capital investment arm of Google has backed more than 300 growing startups including Uber, Slack, Medium, Periscope, Nest and 23andMe. Providing venture capital funding to bold new companies, Ventures invests independently of Google, and provides these companies unparalleled support in design, engineering, recruiting, marketing, and more. They’re not afraid to take on riskier tech challenges such as clean energy, cybersecurity and health, and have devised independent complex computer models to offer better predictions of market outcomes.
Capital
Google Capital is the growth capital fund financed by Google, with a devoted interest in established private companies. Focusing on larger, growth stage technology companies, Capital invests for profit rather than strategic positioning for Google. Led by partners David Lawee, Gene Frantz, and Scott Tierney, Google Capital’s approach includes giving portfolio companies access to Google’s people, knowledge, and culture to support the companies’ growth and offer them guidance. This has served FanDuel, SurveyMonkey, Renaissance Learning and Glassdoor.
