One of the most intriguing, even perplexing news of the latest times have just emerged from Google: they’re going to make fundamental organizational changes in their structure.
A new holding-entity is to be formed and they’ve named it « Alphabet ».
But why? They seemed to be doing very well as-is, anyways.
And why « Alphabet »?
« We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (‘Alpha’ is investment return above benchmark), which we strive for!« , wrote Larry Page himself in a blog post.
Page also explained that reasons behind the decision of practically creating a new owner for Google would be that operations will become « cleaner and more accountable« .
And that the planned restructuring will improve « the transparency and oversight of what we’re doing » and will allow greater control of unrelated companies (like Calico, GoogleX, Google Capital or Nest Labs).
Makes sense, but … well… is that all?
Because unconvincing explanations spawn speculations: aren’t there other reasons for such massive-scale and really complicated re-structuring?
Many analysts are now trying to discover unspoken benefits of this surprising reorganization.
For instance, one speculated extra-reason is said to concern banking: whenever a loan is needed (like for example, for buying back own stock) lenders might be (or might have been, actually) very happy to give money to a proved money-making-machine like the internet businesses of Google (search-engine, YouTube, Android, etc) but scared to death when thinking that this money might go to revolutionary businesses which are merely incipient projects not yet producing any revenue, but also -if completed- prone to become magnets for law-suites (imagine hacked glasses or hacked self-driving cars).
Or at least, they might simply invoke these arguments to get increased rates for their loans.
Being insulated, Google can become an optimized money borrower, able to get loans easier and at lower rates than Alphabet (that is, easier and at lower rates then Google-the-Monolith until now).
The insulation will also help PR: a clear separation between Google-the-Successful and possible failing ventures like Zagat was, will keep the Google brand remain clean and untouched.
Then, possibly, turning from parent to child might bring benefits in legal domain too, like for example when facing regulatory issues with the EU.
Turning from a monolithic monster into being just a child among other brothers and sisters like Calico or Google Fiber might prove really helpful.
And then, of course, predicted or not (oh yes, predicted, if you folks would ask us), there is the market’s reaction over the restructuring announcement: Google shares increased by 6% in just 2 days.
Not so much, you might think.
Well, maybe you will think again when learning what this means as total added amount: over 20 billion USD.
But maybe the most important aspect of this move is that, while Google-the-Succesful remains an actor on the scene, under the spotlight, monetizing even better the glance of our eye-balls,well, behind the scenes, with more control and independence than never, older and newer « moon-shot » projects can be taken care of.
Because these are the projects that really define Google’s genome.
Projects ranging from power-producing solutions to artificial intelligence to human ageing to all kind of droids.
Which will have the exact fate and amount of exposure that Alphabet Inc. decision makers will want as the restructuring will maximize incomes, maximize the control over incomes and optimize the implementation of decisions.
In 2013 Alan Rusbridger interviewed Eric Schmidt, here’s a short excerpt of this interesting interview:
« I suggest that the question of what you do about bad things that can’t be uninvented applies to Google itself. He bridles at the word « Frankenstein ».
« Google is not a bunch of engineers who throw stuff over the wall, » he says rather stiffly.
« A classic example is that a team built a facial-recognition tool. It was just really good – state of the art at the time. We stopped that product for two reasons. One is that it turned out to
be illegal in Europe and the second was that it was not a good product to offer in the US for the same reasons. So we didn’t do it. »
What stopped it in the US?
« Our judgment. I made the decision; I was literally in the room. »
« Facial recognition, completely unmonitored, can be used for very bad things. It can be used for stalking, for example. You know, it’s just we don’t want to be part of that as a company.« »
Well folks, you’ll decide if this gets you reassured or terrified.
An ‘Alphabet’ of course, is one of the best symbols for higher awareness.
And all in all, no matter what the real reasons behind Google’s reorganization might be, one thing is for sure: looking at what they’ve done so far by using just 4 letters (G. O, L and E, the letters composing the name « Google ») makes it just hard to imagine what they’re going to do from now on, when they’re going to use the entire Alphabet.
« ‘G’ is for Google » , titled Larry Page his blog article.
» And ‘M’ is for Money Making », replied a reader in a comment to the article.
Well, unfortunately, ‘F’ just doesn’t seem to be for Funny.
And hopefully, it will not be for errr… « Frankenstein ».