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Google restructuring could rein in business 'chaos'

Sharon Gaudin | Aug. 12, 2015
Creating Alphabet unlikely to bring changes to search or Android, analysts say.

google headquarters mountain view

With the restructuring of its business announced Monday, Google may be trying to gain control over the chaos that its myriad of projects and new business ventures has created.

"This is what they should have done years ago," said Jeff Kagan, an independent industry analyst. "They've gotten out of control... As Google gets bigger with all of these different businesses, they get sluggish. They've gotten too big with too many arms and they're going in too many directions. This should deal with that."

Google, most well known for its ubiquitous search engine, has grown in multiple directions over the last several years.

The company has the popular Android mobile platform, a cloud computing business, Gmail, a cloud-based office suite, the Chrome web browser, the Chrome OS, its Project Ara Lego-like smartphone, a free music service and its Nexus mobile devices.

Oh, but Google hasn't stopped there.

The company also is working on robotics, self-driving cars, the wearable Google Glass, the struggling Google+ social network, delivery drones, its Google Fi network and even Project Loon, a network of high-altitude balloons researchers hope will bring connectivity to people in remote areas. It also has its life sciences projects with Calico, which is studying longevity.

"They have so many businesses in so many different industries and very few of them are related," Kagan said. "It's really incredible how many different businesses there are, and only a few of them are real and profitable, like search and Android. You've got Google cars driving around. You've got drones and balloons in the stratosphere. It's really incredible."

To handle all of these different areas of interest and business, Google announced late Monday the creation of a parent company called Alphabet Inc. Google will become one of its wholly owned subsidiaries.

Alphabet, which is not expected to be a consumer brand with its own related products, will replace Google as the publicly traded entity, with shares of Google morphing into the same number of shares of Alphabet.

Google also has been trimmed of projects that don't neatly align with its core Internet-focused businesses.

For example, Google X, the company's secretive, research arm, will be its own business under the Alphabet umbrella, as will Life Sciences, which includes research on the glucose-sensing contact lens, and a startup funding operation called Capital and Ventures.

Larry Page, a Google co-founder, will be the CEO of Alphabet, while co-founder Sergey Brin will act as its president.

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

 

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