Goodbye, Google. Hello, Alphabet.
In an August 10 blog posting, Google CEO Larry Page announced that he was creating a new holding company, Alphabet, which will oversee a variety of tech firms, including Google, Calico (a bioscience outfit devoted to life extension), Nest, and others. As corporate restructurings go, this one is massive; Page hopes that the new hierarchy will make these companies’ efforts “cleaner and more accountable.”
As Page takes the CEO reins at Alphabet, Sundar Pichai, a high-ranking executive who oversaw Chrome and Chrome OS, will take over as CEO of Google.
At least on paper, Page’s move—no matter how unexpected—makes a certain kind of sense. By shifting its “moonshots” and acquisitions into independent silos, Google can readopt a lean, mean startup mentality. Meanwhile, those moonshots and acquisitions can grow and innovate without having to wrestle against the bureaucracy inherent in the massive Google mothership.
Investors’ Google stock will become Alphabet stock, although trading will continue on NASDAQ under ticker symbols ‘GOOG’ and ‘GOOGL.’ Consumers will probably never notice the difference. For tech pros, it remains to be seen whether Alphabet’s subsidiaries, now that they have a bit more independence, will design different application and onboarding processes to fit their very specific personnel needs. It’s also not outside the realm of possibility that companies such as Nest, overseen more as fiefdoms by their individual CEOs, may grow utterly different cultures from Google.
For those in tech management, Alphabet offers an inspiring lesson: No matter how big your company gets, you can always restructure in order to streamline things for your best talent; as demonstrated by Pichai’s promotion, a restructuring also gives you the opportunity to reward top performers with better job titles, even if their responsibilities stay largely the same.
Alphabet will provide an interesting case study for reorganization; it’s rare that companies attempt something this radical. Can Larry Page pull it off?