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5 things you need to know about Google and Alphabet

Sharon Gaudin | Aug. 14, 2015
A look at what’s changing, what's not and what it all means for Google and its research

The restructuring also means that Google's research projects will get their own executives and their own singular attention.

Relieved of the hefty administrative chores related to managing the Google colossus, the company's research arm can give more attention to things like Internet connectivity balloons, Google Fi and wearables.

"This new structure could help focus the founders' attention, and resources, on all of the much smaller companies and technologies that Google has either purchased or developed over the past several years," said Dan Olds, an analyst with The Gabriel Consulting Group. "We could also see these ancillary businesses receive more authority to make decisions on their own, which could drive quicker innovation and greater consumer impact."

Shimmin agreed, adding that Alphabet companies like Google X, which has been behind projects like Glass and driverless cars, will have more freedom under the new business structure.

"They won't have to worry about pulling resources away from their responsible revenue-making entities," he said. "Research will have its own set of finances. This lets the big multinational company sit separately, while the small, start-up-like entrepreneurial parts are set free. If they're going to have the focus to do more research, we'll see some innovations that have greater vision to them."

A happier Wall Street?

Wall Street's big investors are hopeful that the restructuring means they'll get a clearer look at how the company spends its money and where these different research projects are heading.

For some time, Wall Street has been pushing Google to be more transparent financially. How much is it spending on high-altitude balloons and drones? What is the expected revenue for Google Glass?

The company, despite Wall Street's insistence, has been mum on the subject. Now, though, that could change.

All of the businesses underneath the Alphabet umbrella should provide more financial information. Alphabet is expected to segment out its financials by its fourth-quarter earnings report, which should make Wall Street happy and could boost Alphabet's stock.

"This is Google becoming more transparent," said Kagan. "They were never really transparent and that has been causing them to stumble.... Google is a Silicon Valley creation. Everyone in Silicon Valley loves the young. Google has been growing and getting older, less youthful. This will hopefully help Google look more youthful to investors, workers, users and partners."

Google's new chief

As part of the restructuring, Sundar Pichai, who had been a vice president at Google overseeing Android, Chrome and Google apps, has been named CEO of the new trimmer Google.

"This is the man," said Shimmin. "This is the guy who brought us Android and the guy who has already basically been running their biggest cash cow. He's very charismatic and he's definitely [at the] CEO level of competence and swagger that you would expect to see from a company like Google. I think he's the perfect choice."

 

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