The undisputed titan of online search is transforming itself into a brand new company called Alphabet. On August 10th, 2015 Google CEO and cofounder Larry Page stated that Google will be spun off from its various other endeavors, such as the up and coming driverless car. These other projects, along with Google itself, will be under the new umbrella company simply called Alphabet.
Mr. Page will assume the role of CEO of Alphabet, Google co-founder Sergey Brin will be the President, and Google Executive Director Eric Schmidt will assume the role of Executive Chairman for Alphabet. Going forward, Google is now a subsidary of Alphabet and will appoint Sundar Pichai, current head of Android, Chrome and Apps to CEO. Got all that?
Umm ... So Why Rock the Boat?
The reasons for the sudden shift haven't been made clear as of yet, but I imagine it's an effort to keep on innovating. While under the Google brand, Page and Brin were hoping to literally change the world with projects like the self-driving autos, Google Glass, glucose-detecting contact lenses and even the quest for the foundation of youth.
Strictly from a business point of view, it's really hard to quantify the benefits for each of these experimental projects to shareholders and investors. Be that as it may, by breaking off the core business from new and unproven projects, Larry and Sergey can keep on being trailblazers while CEO Sundar Pichai can concentrate on maintaining and growing the core business.
Generally, the new structure of the companies keeps the Google brand from being part of unproven ventures, but still remain the main income generator of the overall umbrella organization. This would allow greater risks to be taken without interfering with the companies bread and butter, the Google Search product. Case in point, Google+ could have met a much quieter death and be retired with little fanfare or damage to the companies overall brand.
Many Search Engine Optimization experts say Google+ failed because everyone wanted it to be a part of search rather than just a social network. If the new company Alphabet ever considers buying social network to replace it, you can bet your last dollar it will not make an appearance under the Google brand.
How this Affects You the Consumer
For the end user, barely anything changes. The new company will even keep on trading under the name GOOG.
Google will make the change over to Alphabet in the not so distant future — it hasn't been revealed when this move will actually happen. As a side note, you would assume that the new company would use the domain Alphabet.com. Only problem is, Alphabet.com has already been registered by German automaker BMW, so the new Alphabet domain name is going to be abc.xyz. Kind of crazy that the Internet's leading search company doesn't feel the need to use a .com domain anymore. To quote Bill Murray in the film Ghostbusters, "... Cats and dogs living together, end of the world type stuff." Indeed.
Page and Brin may have won the Search Engine Wars, and it will be certainly interesting to see what direction they take next. As Page stated recently, "Google is not a traditional organization. We don't expect to turn into one."