The ABC’s of Google

Last Monday, Google made a surprise announcement.  They’re going to be doing a bit of restructuring, changing things around on a corporate organization level.  What this means is that Google isn’t the head of everything done by Sergey Brin and Larry Page Co. anymore.  A new company, called Alphabet, is.

What is Alphabet?  Basically it’s a new company that now owns Google.  Google’s founders, Larry Page and Sergey Brin, are this new company’s CEO and President, respectively.  This seems a little odd at first; Google’s doing so well these days.  Why change things around?  But when you look a little closer, it makes a lot of sense.

Google does a lot of things under the Google name – things like Google Maps, Gmail, and Google search.  However, Google also owns a lot of other companies, like the smart thermostat company Nest.  These companies don’t really make a lot of sense under the Google name.  Now I’m not saying Google shouldn’t have bought them.  On the contrary, Google has always had the mentality that it’s better to try something even if it fails, because eventually you’ll try something that succeeds.  This is where Alphabet comes in.

Alphabet is the parent company.  Under that is a newer, slightly smaller Google.  According to USA Today, this includes Google services like Maps, as well as things like YouTube.  Android and Chrome also remain under the official Google banner.  Now a part of Alphabet, and on an even plane with Google itself, are companies like Nest, as well as projects like Google Fiber.  I think this makes a lot of sense.  This way, Google can focus on what it does best (providing web services), while the people in charge of Google can focus on what they do best (taking crazy risks and innovating).  It’s a win-win.

And the people at Google seem to think so too.  In the official blog post on abc.xyz (Alphabet’s clever URL), Larry Page says, “Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed.”  This allows Brin and Page to let go of some of the day-to-day business activities of all Google entities, and instead focus more on the big picture.  And I say that’s a smart move.  ••

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A very helpful organization chart of Alphabet and Google, from this video on USA Today.

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