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Google becomes Alphabet: The what, why and how
Knct Social / 13 Aug /

Any keen observer of the working mechanisms of Google ever will not be too surprised with their revolutionary new move. So, what's happened exactly? Well, according to the wires, the company formerly known as Google is now a collection of disparate companies, owned by a new holding company called Alphabet. 

The Google brand is the largest of those companies, and it includes search, advertising, maps, apps, YouTube, and Android. The company’s more low key endeavors – the biotech research project Calico, the Nest thermostat, the fiber internet service, the “moonshot” X lab, Google Ventures, and Google Capital — are all now separate companies housed under Alphabet. However, the restructure has come with a fair bit of controversy. According to Mashable, the British automaker BMW owns a fleet service company with the same name and the domain will no doubt result in Google's Alphabet getting a lot of angry letters, no pun intended


Besides Google revolutionizing and consequentially the way the digital sphere functions, they have also been at the forefront of breaking the age old shackles of traditional organizational structure. They were the first to streamline its huge profits from the search and advertising business into the hiring of strong talent, and then to give employees the leeway to explore their interests, not to mention their policies about hiring, salaries, and 20% free time.


Analysts have been at loggerheads with Google’s structure: its plethora of businesses was an extremely tough nut for them to crack. The primary challenge for analysts has been that the performance of the main business was not transparent—the financial returns of the search engine and advertising business could not be easily observed separately from the investments in all of the new businesses.  The new structure ensures that there will be autonomous accounting numbers produced for the Google business, and perhaps for the others as well.


Investors will inevitably push for more and the market’s response has so far been positive, with the stock price up 6%. While it's still the early days, if Google's track record is any measure, the future certainly looks very interesting. 

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