In the long term, forming Alphabet basically seems like a way for Google to avoid following in the footsteps of Microsoft and IBM, companies that faced stagnation at points in the face of younger, nimbler competitors (like Google). When you’ve got successful legacy businesses, like Google’s search and Android OS, sometimes it’s better to keep them separate so they don’t get in the way of new ideas. Each of Alphabet’s subsidiaries will have their own CEOs and will be managed somewhat independently, which should technically make it easier for them to innovate without worrying about what every move means for the entire conglomerate. At the same time, they’ll also be able to share their successes with other Alphabet companies.
Alphabet includes the following entities:
- A smaller company called Google, headed by CEO Sundar Pichai, that includes the company’s core businesses. Those businesses: “search, ads, maps, apps, YouTube and Android and the related technical infrastructure.”
- Other businesses, “such as Calico, Nest, and Fiber, as well as its investing arms, such as Google Ventures and Google Capital, and incubator projects, such as Google X,” which “will be managed separately from the Google business.”
“Google is not a conventional company. We do not intend to become one.” – Larry Page
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