The Larry page is visible on Google
The global corporation will soon be called "Alphabet" | So roll up
Google everything around
Few names in the age of the Internet have become as burned in the language as Google. The verb “googeln” even officially exists in the Duden. Now the big surprise: Google will merge into the newly founded umbrella group Alphabet.
The Internet giant Google is being radically rebuilt: The web business with the name Google is to come under the umbrella of a new parent company. And this is called: Alphabet. This is what Google co-founder Larry Page announced in a blog entry on Monday.
Today's Google shareholders are getting shares in Alphabet instead. The renovation is to be initiated later this year.
The new Alphabet Group
What exactly is going on with Google?
Almost nothing changes for the Google user!
The name Google won't go away. The traditional web business with search engines and online advertising is to be separated from new ventures such as self-driving cars or drones.
Google is firmly anchored in common parlance in the western world. Alphabet, on the other hand, will probably only be a company name.
The core web business, Google, is to be run by 43-year-old top manager Sundar Pichai, who was considered the right hand of Page in this area and who has been given more and more responsibility in recent months.
What does Alphabet do?
Alphabet becomes the umbrella group to which different companies in very different markets belong. If one of these companies fails, the brand name Google will no longer be affected.
The structure of Alphabet will probably be comparable to that of the Berkshire Hathaway investment company of multi-billionaire Warren Buffett: So many very different companies under one roof.
The establishment of the group with a new name is the last visible step in a long development. Internet giants like Facebook, Amazon or Google started with a core invention and gradually expanded their portfolio. For a long time now, these companies have not limited themselves to the Internet. For example, Amazon is planning to enter the supermarket business.
The former start-ups have long since risen to become powerful corporations. This can be seen in the restructuring of Google.
Why are the founders restructuring their company?
The conversion should make the company more transparent, wrote Google co-founder Larry Page in a letter on the Google site on Monday. He is moving from the head of Google to the top of Alphabet.
"Our company is doing well today, but we think we can make it cleaner and more responsible," said Page, explaining the restructuring. Under Alphabet's umbrella, Google's “not really related” businesses could be better managed independently.
He continued, "Alphabet is about business that thrives on strong leaders and independence."
Further reasons for the conversion:
►Google is currently pursuing projects as diverse as drones for delivery services or intelligent contact lenses for diabetics. In addition to the profitable core web business, there were always business ideas that burned money or even flopped. The new umbrella group separates these companies from the cash cow.
►Investors had long worried that these future projects would devour a lot of money - while the lion's share of the money is still generated in the core business with online advertising in the Internet search environment.
Investors are now hoping for a clear picture. The announcement of the new structure was already taking effect, causing Google shares to rise by six percent after the hours of trading. Google CFO Ruth Porat, who came from Wall Street, will work in the same position at Alphabet.
► Under the umbrella of Alphabet, Larry Page has other, more diverse markets: "We have long believed that companies get comfortable with doing the same things with just making minor changes," wrote Page.
The Google founders wanted to "start new things". The individual companies should act independently within Alphabet."The whole point is that the alphabet companies should be independent and develop their own brands."
► With the new structure, the individual companies under the umbrella of Alphabet have more decision-making power. That should make the entire group more innovative.
► But there are also very human reasons behind the restructuring to Alphabet: As “fusion.net” reports, co-founder Larry Page is said to be bored because Google runs almost by itself. According to the website, Larry Page wants to know again as an entrepreneur and not just take the fruits of his earlier work.
► Google also has to deal with a lot of rejections and attacks. The EU Commission is taking action against Google because it could abuse its market power. Not only the EU but also many consumers see Google quite critically. This criticism now remains with Google for the time being and does not automatically spill over to Alphabet.
Why the name Alphabet?
“We liked the name alphabet because it is the name given to a collection of different letters that represent a language. One of the most important achievements of mankind and also the core of how we catalog when doing Google searches, ”wrote Larry Page.
The new name shows that the founders are very confident. The name "Google Earth" already expressed the founders' desire to change the world. With the name Alphabet for your group, this wish becomes clear again.
Which companies are behind it?
There are already very different companies under one roof at Google. Here is a selection from the Google ABC:
►C for Calico: The health company should primarily research aging - in order to learn how to slow it down.
►F as in Fiber: In the USA, under this name, the group offers ultra-fast Internet access via fiber optic connections in around half a dozen cities.
►G as in Google: As an Alphabet subsidiary, the Internet search engine, advertising business as well as YouTube and Android will continue to be bundled under the traditional name of the group.
►N for Nest: Google bought the provider of networked thermostats and smoke alarms in early 2014 for more than three billion dollars. Nest co-founder Tony Fadell, who once helped develop the iPod player at Apple, is now also responsible for the Google Glass data glasses, which flopped at the first attempt.
►V for Google Ventures: The start-up financier of the Internet company, which among other things got involved in the controversial transport service broker Uber.
►X like Google X: The innovation laboratory, in which, among other things, self-driving cars as well as drones and balloons for internet supply of remote areas were developed from the air.
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