Google Restructures Into Alphabet – Now What?

Wow. I take one day off and Google announces a complete restructuring of its corporate organization. Been reading lots of different takes on this move, so I thought I’d offer my two cents and a convenient round up of the coverage I’ve read.

In case you’ve been under a rock (or foolishly took a day off!) Google just created a giant holding company to manage previous divisions that will not become their own wholly-owned subsidiaries of Alphabet. The largest of these will be Google, set to include search, YouTube, Maps, Android and Chrome. Interestingly, Alphabet will report Google’s earnings separately as of Q4 2015. They claim that this will provide more transparency about each newly formed company’s financials.

According to the Wall Street Journal’s piece, they are looking for a corporate structure more like that of Berkshire Hathaway, Inc. as investors have been becoming “more uncomfortable” with Google’s investments in non-core businesses. This move should allow the company to continue to pursue whatever it likes from a business development standpoint, while keeping a more “clean” accounting of the cash juggernaut of search.

Those businesses generated nearly all of Google’s $66 billion in revenue last year. Advertising, primarily on search and on YouTube, accounted for 89%. Google’s next-biggest source of revenue was sales of apps, music and movies through the Play store on Android phones. (from Wall Street Journal article)

This is all really fascinating. I wonder if it is going to ultimately be better or worse for the top execs at Alphabet to have the Google core business financials reported separately. On the one hand, it will show just how strong that business entity is, but with it still being part of the larger organization that includes all of their “moonshot” arms, from an investor standpoint will it only fuel ire about the drain the other wholly-owned businesses are on the Google cash cow?

Also, how in the world does a company the size of Google not get ownership of the most obvious domain (alphabet.com) and Twitter handle (@Alphabet) for their brand new entity?

On the plus side, their new sans serif font is refreshing!

Does this, indeed, give them some wiggle room on that whole “don’t be evil” thing?

As we say in search – never a dull moment. Thanks for this week’s seismic moments Google!

Roundup of articles about the announcement:

G Is For Google – official Google post announcing the restructuring (via Google)

Google Creates Parent Company Called Alphabet in Restructuring (via Wall Street Journal)

Larry Page’s Letter Explaining The Move (via MarketWatch)

Meet Alphabet, The New Conglomerate Absorbing Google That’s Run By Larry Page & Sergey Brin (via Marketing Land)

It’s All About Keeping Talent (via Tech Crunch)

Sundar Pichai Appointed Google CEO As Google Becomes Division Of Alphabet Inc. (via Search Engine Land)

Alphabet Lets Google Chase Moonshots & Remain Profitable (via Wired)

Now It Can Be Evil – Twitter Reaction To The News (via Wired)

Meet Alphabet (via Tech Crunch)

Why Larry Page Is Stepping Down (via The New Yorker)

Google Is Now Alphabet, But Does Not Own Alphabet.com Nor the @Alphabet Twitter Handle (via Tech Crunch)

Hey – They Are Using A New Font & There Is a “Silicon Valley” Easter Egg (via Business Insider)

Do You Trust Larry Page? (via Stratechery)

Irony Alert: Could Alphabet’s Hidden Link To Hooli Get It Banned In Google? (via Search Engine Land)

What are your thoughts on all of this?

Please share in the comments or let’s talk about it on Twitter (@NeptuneMoon).

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