Top 3 Reasons Why Alphabet is Google's Best Idea Yet

By now, you’ve probably heard about Google’s big Alphabet announcement. If not, it’s time to crawl out from that rock you’ve been living under. On Monday, August 10th, CEO Larry Page announced that Google will create a parent company for itself. Some may think this audacious decision is a lapse in Google’s judgement. However, Alphabet might just be their best idea yet. Here are the top three reasons why:

1. Placates the Investors
   The key to the success of any conglomerate is to appease the investors and stockholders. One of the main reasons behind CEO Larry Page and co-founder Sergey Brin’s decision is to prove to investors that their harebrained ventures are worth the investment. Alphabet will draw a clear line between their core businesses, like Google, and their not-yet-profitable endeavors. The reorganization will provide more financial transparency to investors, and will give investors an idea of Google’s true stock value.
2. Makes Room for Innovation
   The reorganization will free up bandwidth to pursue even more innovative endeavors. In a recent blog post from CEO Larry Page, he says, “This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.” Alphabet will focus on Google’s projects (affectionately called “moonshots”) that are years from becoming revenue-producing products. The new configuration will give the various Google divisions more leeway in decision-making and will keep the divisions agile.
3. Provides Independence
   Under the Alphabet umbrella will be: Google itself, its investment divisions, its life sciences lab ‘Calico,’ Nest, Fiber, and many other ventures. The new structure will offer independence to each subsidiary, which will give each the chance to develop its own brand. By giving freedom to these divisions, each will be able to make its own decisions, and step out of Google’s shadow to create individual opportunities for success.

Traditionally, a parent company is created by purchasing smaller companies, or by establishing subsidiaries. However, Google has once again proven to be innovative in its business approach. Although some may question the decision, Alphabet is probably one of the best ideas that Google has had to date. W ith its various ventures finally freed from a corporate constraint, there’s no telling what exciting innovations are in the works.

Tags

Scroll, or tap/click a list item to filter posts by that tag.

• Business
• Google
• Innovation
• Management