Google will cease to be a standalone company working in various areas of business and instead will transfer power to another entity, known by the name of Alphabet. It surely sounds strange that such a giant aims to reposition itself and run under the umbrella of a larger structure. However, the basic rules of marketing state that when you become too versatile in your business and your areas expand to territories that can become delicate to manage, it is better to rethink your strategy and keep focus on what you know you are best at. Google will be a subsidiary of a company called Alphabet, thus focusing on the tech development aspects of the business.
All the other areas of interest and development will grow separately, in distinct managing structures, for a better and more applied manner of doing business. Google has come too far from being simply a search company and as it evolves, it’s harder to keep track and profits growing simultaneously for everything that the tech giant struggles for.
Let’s just take some time to think things through a little. Google is first of all the most widely used search engine, it owns YouTube, Android, it is at the same time a big player in the self-driving cars business, delivery drones, life extensions, social networks, the advertising business and the list can go on. Everything is growing altogether and separately, so it can become quite challenging to master and manage everything at once.
Alphabet is an excuse to keep Google away from explaining why a search company is diving into such far-out territories. It is also a way to encourage progress by avoiding stagnation. Alphabet allows “more management scale, as we can run things independently that aren’t very related”.
Sergey Brin is going to run Alphabet as CEO and president while Google will be mastered by the master puppeteer to rise above, Sundar Pichai.
We are dealing with professionals here, who know how the world of business works. A basic rule of marketing advises companies “to resist the pressure to extend the equity of their brand”. This applies perfectly to product lines. One could chose to extend the product lines to unproven areas but it would lead to exposure, which is extremely dangerous. Most companies tend to believe that the power of a brand helps in selling new products but more often than not, the new product will hurt the old one. One of Google’s basic rules states that “it’s best to do one thing really, really well”. And it will certainly do so, once Google regains its power as the greatest search giant and that only, with no other areas of interest. Google’s new Alphabet platform will do the rest.
Image Source: io9