​On Monday, Google co-founders Sergey Brin and Larry Page announced a substantial restructuring of their benevolent tech glowcloud: Alphabet. Here's some essential reading that spells out why Alphabet exists, how it works and the potential impacts.
SIMPLE IN DESIGN, COMPLEX IN EXECUTION
Under the new structure, Mr. Page is to run Alphabet along with Sergey Brin, who co-founded the web search business with him in 1998. Alphabet would be the parent entity, housing several companies, with the biggest among them Google. [...]Â The change is an effort to keep Google innovative. As other big technology companies have gotten old, some have been felled by a desire to remain wed to their traditional core businesses. With its new structure, Google can give operating divisions more leeway in making their own decisions and keep the businesses more nimble.
WE HEAR THIS IS A SUCCESSFUL COMPANY
The new structure takes a page from Buffett, 84, whose Berkshire Hathaway Inc. is a holding company for disparate businesses ranging from insurance and railroads to running shoes and ice cream. In the past five decades, he’s built one of the largest businesses in the world by eschewing fads, buying when others sell, and taking a long-term approach to investing. Through 2014, Berkshire averaged annual returns of almost 22 percent, more than double the Standard & Poor’s 500 Index.
IT'S GOOD
This unexpected transformation shows just how diverse the company has grown since its founding 17 years ago. Though Google began as a search company, it now dabbles in everything from smartphone operating systems to product-delivery drones to cancer-detecting wristbands. But the move also underscores that Page and his top lieutenants, including new chief financial officer Ruth Porat, are keen to prevent the moonshots from dragging down the company’s stock price and limiting its ability to attract top talent.With Alphabet, Page can show investors that the company’s bread-and-butter businesses remain highly profitable, even if the moonshots fail to turn a profit for years on end. The upshot of Alphabet is that, beginning early next year, the company will report Google’s core earnings separately from moonshot earningsâ€"or lack thereof, as the case may be.
[WIRED]
IT'S BAD
The word is explicitly used by many businesses around the world. Alphabet is the existing name of more than one fashion company. It’s also an accessories business, a specialty retailer, an international car management company, a signage company, a design firm, and a hotel. It's the name of a German software company, stylized as alfabet. And let’s not forget all the various alphabet-related products out there, the most famous of which is probably Campbell’s popular alphabet soup.
[Slate]
BURIED LEDE
Ten years ago, the Indian-born Pichai, 42, was a product manager at Google, and his domain consisted of the search bar in the upper right corner of Web browsers. He then persuaded his bosses to wade into the browser wars with Chrome, which in time became the most popular browser on the Internet and led to the Chrome operating system that runs on a line of cheap laptops called Chromebooks. Pichai took over Gmail and Google Docs in 2011. In 2013, CEO Larry Page put him in charge of Android, making him one of the most powerful technology executives in the world. Page says Pichai “has deep technical expertise, a great product eye, and tremendous entrepreneurial flair. This is a rare combination, which is what makes him a great leader.â€
Going Incognito
[Y]esterday’s big corporate restructuring â€" and the announcement of the Larry Page/Sergey Brin umbrella corporation, Alphabet â€" can be viewed as part of Google’s continued attempt to distance itself from its ever-increasing image as the panopticon in action, surreptitiously sowing the seeds of the dystopian future.
[Buzzfeed]
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