Alphabet Enables Google To Remain Innovative
On August 10th, 2015, Google co-founders Larry Page and Sergey Brin announced the formation of Alphabet, the holding company which will include Google and a portfolio of companies to spur innovation (see Figure 1). A new website www.abc.xyz emerges and Google will still trade as (GOOG). Check out the parody of the HBO Silicon Valley comedy here (www.hooli.xyz)
Figure 1. The New Google Alphabet
For those in the know, Google has struggled with remaining focused on the existing operations which fund innovation and the new areas which have massive market potential. Sundar Pichai will lead as the CEO of Google which includes Ads, Android, Apps, Maps, Search, and YouTube. Eric Schmidt will serve as the Executive Chairman of Alphabet while Sergey Brin will head up Google X. The remaining Alphabet companies will retain their current leadership. Arthur Levinson will run Calico. Tony Fadell will still lead Nest.
Figure 2: The Run Down News Analysis: Inside Alphabet – G Is For Google
The Bottom Line: Move Spurs Focus On Innovation, Avoids Failures Of Past Innovators
History is rife with the failure of large has-been corporate giants such as AT&T, Bell Labs, General Motors, Kodak, Sony, and Xerox who failed to recognize the failure to revinvent the company. With innovation stifled in bureaucracy, these organizations failed to retain their ability to compete and disrupt themselves. The new holding company Alphabet gives Google an opportunity not to repeat the mistakes of past innovation and technology giants and should enable the Alphabet leadership to focus on their specific innovation mission. Customers and shareholders should find that this new governance model will unlock the hidden potential within Google and improve the sagging morale and low productivity among the teams.
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