It is the second most valuable brand on Earth. A brand so embedded into each of our daily lives that it became a verb. So why does Google need a whole new Alphabet?
Without question, it is the biggest and most surprising brand story of the year. And it says everything about Google that its counterintuitive decision to restructure as Alphabet, a new umbrella brand that houses the core Google business and its array of other weird and wonderful side projects, has been largely welcomed by the branding experts The Drum has spoken to. As co-founder Larry Page wrote in the company's launch literature: "Google is not a conventional company." Alphabet fits that narrative perfectly.
It wasn't long after the company's foundation in 1998 that Google entered the lexicon as a byword for search. It remains so today despite the fact that its business properties span everything from that eponymous search engine through YouTube, Maps, apps, thermostats, glucose-measuring contact lenses, driverless cars and plenty more besides. As Dom Robertson, managing director of RPM, puts it: "Old Google had become too big. The creation of Alphabet is a savvy move and has freed the unwieldy and fragmented beast that had become Google from itself."
The new setup sees a pared back Google – ads, search, YouTube, apps, Android and Maps – operate as one company under Alphabet ownership. These core entities make up 90 per cent of Google's current total revenues, so it is little wonder the company wants to separate (and perhaps insulate) them from some of its more leftfield, futuristic and altogether riskier pursuits. If these pursuits fail, like Google Glass did, they won't harm the lucrative Google property. And without the scrutiny that comes attached with a Google label, some of these sideline projects might even stand more chance of success.
"That they chose to brand it Alphabet, rather than any endorsed creation, say 'Google holdings', 'Google Enterprises' or 'Planet Google' is an indication of the level of risk they intend to take with their increasingly diversified ventures," says Uri Baruchin, strategy director at The Partners. "This will protect their core business and established brands from any failures (Google Wave and Google Plus both introduced a measure of negative impact on the Google brand, but what if they were simply ‘Wave’ and ‘Plus’?). It will also open the way for them to own more successful standalone brands, such as YouTube."
As well as giving Google's own creations more room to develop, another Alphabet advantage could be that it makes the company more attractive to the emerging tech companies it has in its sights for acquisition. "Google’s main competitor Facebook has much more success in this area," says Lida senior strategist Adam Reader, pointing to Instagram and WhatsApp as examples of the latter's better progress. "A structure such as Alphabet makes this success much easier to emulate than the previous Google setup, where startups would be absorbed into Google, essentially becoming just another cog in the machine. Allowing the individual companies to retain much of their individual identity and leadership teams will be a much more appealing proposition for startups and established companies alike."
Many observers have already said that the name itself, though a cute play on Google's heritage, is academic. The Twitter barbs that Alphabet is going to be somehow mixed up with other companies, or difficult to find online, don't hold water. As Clinic digital director Guy Hatton quips: "When you own Google you're never going to struggle with SEO."
And besides, this isn't a brand for you and me anyway. "Let’s be clear – Alphabet is the name of a corporate entity and is aimed at investors and at Wall Street," says JKR strategy director Katie Ewer. "It’s not the name of a consumer brand, and so it also seems fitting that it’s not a very corporate sounding name. Rather, it feels friendly and colourful and optimistic, which seem like the right attributes for a company that was produced by Google."
As ever with Google, there will be accusations that its motives may not be as colourful, charming and well intentioned as they appear on the surface. There have been suggestions – posited on these pages, no less – that Alphabet may be a buffer to protect Google from the anti-trust issues it continues to be dogged by.
If Alphabet is designed as a cleansing agent, it could well succeed, according to the Bulletproof head of strategy Joseph Oliver. He says: "The move has – in the words of its chief executive, Larry Page – helped convey to the world Google's intentions of making the company’s myriad projects and activities 'cleaner and more accountable'. It highlights Google’s positive plight to realise ground breaking ambitions that go above and beyond search and information technology."
Whatever Google's real reasons, the rewriting of its brand story through Alphabet would appear to give it the breathing space it so desperately craves. "The kid's play block look certainly positions Alphabet as far away as it can from an evil empire corporation," says Clinic's Hatton. "A clever move with a name that covers everything but says nothing in particular. Everything and nothing – a brand's dream canvas."