So what does Alphabet, Google’s shock news mean?
Google's restructure has positioned it for the next decade, allowing it to build a more prominent offering beyond its core business that could help it answer the requirement of the EU anti-trust committee to partition elements of their business
Google shocked the world last night with the announcement that it would rebrand its parent company to Alphabet, with company co-founders Larry Page and Sergey Brin now acting as its chief executive and president, while former Android and Chrome chief Sundar Prichai will serve as the chief executive of the core Google company. The Drum spoke with members of the UK advertising industry to glean their insights into the reasons behind the move.
The announcement, made in a blog post penned by Page, describes Alphabet as “mostly a collection of companies”, with the “newer Google” described as “a bit slimmed down”, while the companies that are “pretty far afield of our main internet products” contained in the wider Alphabet grouping.
Page claimed the restructure will allow Google to remain focused on its core business of online companies with Pichai at the helm, while allowing it to also develop new arms of the business, such as its autonomous vehicles, and life sciences pursuits.
Industry sources claims the manner of the announcement shocked Google employees themselves, with the vast majority of staff not informed until moments before the rest of the world found out. Below are the key reactions of UK-based professionals in the advertising and tech industries on how they read the move.
Gareth Davies, chief executive of data intelligence company AdBrain,
Alphabet is a conglomerate structure, and you can see how it makes sense.
You start a company and come up with version one of your tech, and then you come up with version two. Then your engineers get to work during their 20 per cent time [Google’s much-fabled policy of giving employees time to develop new products and services under their own self-direction] to come up with something entirely different.
Google has been aggressively innovative since day one, and long been innovating in things like bio-medics, through to driverless cars that there’s now so much diversity of mission that it makes sense to split that out. It’s just good business, and good management.
Google has got a lot of flack in the advertising business for being so dominant in search and related services, and it currently is under investigation from the EU – something it thought it would have resolved – that it makes sense to carve out its advertising business. So now its future services – be it ‘Driverless Cars Inc.’, etc. – won’t necessarily be affected by Google Inc. That’s an intelligent reaction to the way governments regulate, both today, and for tomorrow.
Innovative companies innovate, and then governments work out how to regulate around it.
Danny Hopwood, VP of solutions & platform, EMEA, at Publicis Groupe’s Vivaki
Taking it at face value, Google has just repositioned itself for the next decade. Google has always associated itself with creativity and innovation however these have not always been the first things that spring to mind when people think about the company. Rather, it has always been the stable of search advertising and technology for advertising. Despite their best efforts to remind everyone that they have plays in health, cloud storage and computing and drones to name a few, the headlines are mostly dominated by the anti-trust debate to do with a part of their business they see as automated and just maintenance - advertising.
The new vision is not confined within the structures of the Google brand and goes some way to change perceptions. It also may help them beat some of those anti-trust issues that continue to plaque them. Separating their advertising and ad technology business from their broader consumer products and services, may help them answer the requirements of the EU anti-trust committee to partition elements of their business.
There is still a lot to be explained but this could be seen as a re-envisioning for Google and their business and the flipside of that being they may be able to solve some legal problems. For now I suspect business as usual but ‘bravo’ for the courage and it will be an interesting space to watch.
Anil Pillai, chief executive UK, Middle East & Africa at DigitasLBi
This is a game-changing move for Google, which will allow its founders to focus on building new businesses and innovating across multiple industries.
The acquisition of British artificial intelligence business DeepMind last year signaled Google’s intention to lead the market in robotics, and this restructure will enable it to further develop its commitment to AI while also making further inroads in areas like healthcare, transport and space travel.
Alphabet brings us a big step closer to a world where one company has the power to transform every aspect of our lives – for good or ill. Whether Alphabet will stay true to Google’s ‘Don’t be evil’ motto remains to be seen.