Google Alphabet

Google, never happy with a slow new day, was able to create a brand new company with one press release that's so big that it actually owns Google itself.

Confused? You're not the only one, so let me try and break this down.

Earlier today, Larry Page issued a press release. He and Sergey Brin have always believed that Google could be more than a conventional company. They went from search, into video, maps, becoming an MVNO, and the world's largest mobile OS. But more recently, they started diving into different areas that would have more of a profound impact on us as a whole if successful. Projects like Loon, providing Internet via weather balloons, and Calico, a human life longevity program. Google began to stretch itself thin, and thus Alphabet was born.

Alphabet is a unique name (and ahead of Apple in the phone directory), but it works. In his Press release, Page said,

"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."

So this effectively means that Alphabet is not a mere rebranding. You don't be using Alphabet Mail or Alphabet Maps anytime soon, since the whole point of Alphabet is to allow the subsidiary companies to run and develop themselves however they see fit. 

So, with Page and Brin effectively leaving the daily operations of Google's core products, who's in charge? That's where Sundar Pichai, the man behind the Android & Chrome teams, comes in. Pichai, over the last few months, has been overseeing the core operations of the newly slimmed down Google, focusing on continuing providing the best services through Gmail, Maps, YouTube etc. And while we don't exactly know which pieces of Google will land up in Alphabet's Alphabet of companies (such as Google Auto or Project Fi) we do know that Pichai will be leading a slimmed down, more focused Google.

So, here's the A-Z of Alphabet:

  • Alphabet (the main company)
  • B
  • Calico (focused on longevity)
  • Capital (investment)
  • D
  • E
  • Fiber
  • Google (now led by Sundar Pichai and includes search, ads, maps, apps, YouTube, and Android)
  • H
  • I
  • J
  • K
  • Life Sciences ("that works on the glucose-sensing contact lens")
  • M
  • Nest
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • Ventures (investment)
  • W
  • X lab ("which incubates new efforts like Wing, our drone delivery effort")
  • Y
  • Z
"We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant."

If you're wondering why Google is on that list, it's because Google is now a wholly owned subsidiary of Alphabet, and will be replaced by Alphabet Inc. as the publicly traded entity, however the two classes of shares that the company offers will continue to be traded as GOOG and GOOGL on Nasdaq.

While this move certainly caught Wall Street and the entire tech world by surprise (I woke up from a nap thinking I had slept straight through to April 1st, 2016), it formalizes a shift in Google that has been apparent for some time now. Both Brin and Page have been more focused on sections of Google like X Lab and Calico, and rightly so. It's the natural evolution of the two that brought us something like Google in the first place, and the natural progression for a man like Sundar Pichai, who ran the entire I/O 15 Keynote this year. While this seems like major news, and in a sense it is, we likely won't see the impact of this shift for years. Even then, the impact will likely have a minor impact on the core businesses and services that Google itself provides.

There's no real way to see how this will play out, but I think that with a slimmed down, more focused Google, Pichai will be able to achieve some incredible things, while Brin and Page can continue to work on their moonshot projects.

We won't have a full list available of Alphabet's subsidiaries until the Q4 financials have been filed. As of writing this, Alphabet has broken the cardinal rule if starting a new company: make sure you own the URL. Currently they own neither @alphabet not, but I suppose it's only a matter of time until they do.

You can read Larry Page's Alphabet press release here.