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Greg Monaco

WTF Is Alphabet? And What Does It Mean for Google?

First published by Broadcasting & Cable

When I heard the announcement of the Google re-org and the declaration of “Alphabet” as the mother ship, my reaction was, well, this article’s title sums it up.

By definition of the word, Google is as large as you can get. And, after decades of experimenting, building, and acquiring, they’ve certainly lived up to that — as in a massive, massively-profitable geek house of cool.

Their shape shifting has always intrigued me. Are they a search engine? A map engine? A self-driving car engine? A silly eyewear engine? After years of constant alterations and transformations, I don’t think anyone would disagree with calling Google an “innovation engine.” Some innovations are successes, some not-so-much — which, I imagine, drives Wall Street a little nuts. Hence, the restructuring.

Through the years, I have found Google to be an inspiration on many levels. A free-spirited version of capitalism, complete with job titles like “Jolly Good Fellow” (aka engineer Chade-Meng Tan). Their halls are filled with youthful idealism. Their business untethered from the confines of mere survival. The cofounders Larry Page and Sergey Brin can afford to play. And play hard. Perhaps even a little recklessly (Google Glass). But you just have to applaud and respect the relentless pursuit of ideas. If you haven’t yet, check out Google Cardboard.

But the announcement of Alphabet seems the start of a new brand of discipline for Google. When you read Page’s explanation of Alphabet it makes sense. Completely logical, rational, and perhaps even a little boring — though I do love the new URL abc.xyz.

He writes, “Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed.”

This is an opportunity for Google to bring order and define lines. The business units will fall neatly into silos and will be able to focus and operate independently. Doesn’t it sound so mature?

Google has been a catch-all for doing-it-all with tech and code. From browsers, to drones, to Internet-connected balloons. Their core business has been hard to define. And that’s what Wall Street would like to do. The founders agree.

The suits want financial transparency. They don’t want Page and Brin to take big chances with investments under the Google banner. They want their money placed in well-defined investments.

But to a business that has done so well blurring the lines, my question is, will Alphabet actually allow Google to do more? By setting up boundaries, will the founders have more freedom to take chances and invest as they please? (Maybe even, as some suggest, paving the way to a new advertising company.)

This is where I believe the re-org makes sense. But in an ironic kind of way. Page and Brin have crafted a win-win with the investment community. By way of a new order, they are further liberated to explore big ideas. By confining and defining the roles of the companies, they can go deeper and invest with more precision.

Page opened his letter to the public with this line. “As Sergey and I wrote in the original founders letter 11 years ago, ‘Google is not a conventional company. We do not intend to become one.’”

I have friends at Google who are absorbing friendly jabs of now working at a company called Alphabet. But those buddies will soon tire of the joke, as Alphabet starts to quietly observe Google, etc. from its lofty perch. And your new slimmer, trimmer Google will continue its reign as an innovation engine, for now.