News of Google’s move into umbrella company Alphabet shocked the tech industry this week. If you’re still confused about what this all means exactly (don’t worry, a lot of people are), here’s a very brief breakdown:
Google founders Larry Page and Eric Schmidt found themselves at the helm of an organization that was part extremely profitable search engine/advertising platform, and part innovation think-tank, spawning boundary-pushing ventures that sound cool, but weren’t necessarily turning a profit.
In addition to this mangled web of Google-branded products, they had the problem of figuring out who exactly was responsible for what. The answer? Alphabet.
Alphabet is in effect a parent company (with Page as CEO and Schmidt as President), housing a collection of businesses, each one now free to develop its own brand. One of these businesses is the search engine we all know and love, Google (now run by CEO Sundar Pichai).
Here at Falcon, big events like this make us want to sit up and listen in to how people are reacting, so when the news broke, we did exactly that. For a brand as omnipresent as Google, the announcement of such a restructuring is a prime opportunity for consumers to become suspicious. People venting skeptical ‘Google is evil’ accusations on their social channels is nothing new, and the Alphabet announcement was an opportune moment to begin speculating about an evil plan for world domination. Diving in to the data however, we found something curious:
Social buzz around the Alphabet announcement was largely positive.
The data shows that this positive reaction is due to two things: 1. A lot of people are excited that the new CEO of Google is from India. 2. A lot of people are experiencing a sense of renewed faith in Google/Alphabet’s vision as company.
Sundar Pichai, originally from Chennai, has sparked a landslide of excitement across Twitter in particular:
Makes sense really. India is a hugely active nation on social media, and many Indians are excited to see their nation represented in the elite echelons of Silicon Valley.
The second point indicates a potentially colossal victory for Larry Page. Looking through popular conversations, words like ‘innovation’, ‘accountability’ and even ‘startup’ are cropping up in connection to the multi-billion dollar Silicon Valley giant.
Where people could once only criticize Google for monopolizing the world’s ad space and data collection, the tide seems to be turning. If you think about Google’s brand narrative in terms of Aaron Zamost’s clock analogy (where all Silicon Valley startups move through a cycle of popularity and relevance), Google is now reaching its phase of rebirth. Fashioning a new company identity has sparked a flicker of positivity in the Twittersphere. People are now hopeful that Alphabet’s businesses will keep alive the original startup mantra of innovation and creativity, rather than become an evil entity reminiscent of the Terminator movies.
Looking at this objectively, it’s likely that Page and Schmidt’s interests stretch beyond the nuances of ad-targeting, and this is exactly what Google (the internet business) is driven by. They’re both innovators, they want to change the world. The restructure now allows them to focus their energies of Alphabet’s other ventures, which include sky internet and achieving immortality.
An umbrella company turns these ventures effectively into small startups, run by their own teams and free to develop their own brands. It also allows for investors to stay happy with the businesses that are turning huge profits (shares in Google have jumped 6% since the announcement) and assigns more accountability to those that aren’t.
Alphabet might also be seen as a new paradigm for scaling tech startups. Page and Schmidt are proving that it’s possible to stay agile and innovative even at scale, and the way to achieve this is by creating smaller sub-divisions. Not only does this increase accountability, but it’s good for attracting talent and allowing for career progression. A great model for allocating resources effectively.
For consumers, there is still the question of data sharing. However, Page has not commented on whether Google data will be shared and utilised by other Alphabet businesses.
So what does the future hold? We honestly don’t know yet. What we do know is that a lot more energy is going into some very adventurous business ventures, and this might result in some powerful technological developments that will shape our future. Google has long held to the motto, “Don’t Be Evil.” Can we trust Larry Page to adopt the same pledge at Alphabet? Only time will tell.