Learn the Alphabet all over again with our breakdown of Google’s restructuring

Google Alphabet
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For years now, Google has been expanding its reach to all manner of tech and business holdings, like a multicolored Kraken sitting at the heart of the Internet. Advertising, pharmaceuticals, even artificial intelligence — Google has tendrils that reach seemingly everywhere.

The growth of the company’s empire has been startling, prompting unease over privacy and its ability to control the flow of information in the digital age. It seems that Google’s founders recognize the contentious nature of their colossus, especially given that CEO Larry Page recently announced the company would undergo a dramatic restructuring, with Google and its associated businesses forming a network owned by a new holding company known as Alphabet.

Since the announcement, there has been much speculation about why Google’s leadership would do this. Under Alphabet, subsidiaries such as Google will be run autonomously, with each being able to focus on its own particular business. This would mark a massive shift from the current setup, with Google in charge of a number of diverse companies, some of which are wildly divergent from Google’s core business. Page claims that the move will allow for cleaner operations and more accountability; some experts theorize that the restructuring is an attempt to mollify investors annoyed by Google’s increasingly wild investments.

Regardless of the reason, Alphabet will likely be one of the dominant conglomerates worldwide in the years to come, having inherited Google’s bountiful holdings. Many divisions of Google will also find themselves newly independent. The new landscape might be a bit confusing at first, so those interested in following Google’s business may want to acquaint themselves with the new state of affairs. It’s a bit of doozy.

Choose your department:

Web-based business

Google

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The most explicit changes so far will happen to Google, which, according to founder Larry Page, will be “slimmed down.” The new Google will focus primarily on Internet and advertising efforts, with many of its former subsidiaries being spun off under the aegis of Alphabet. This seems to include most of the divisions associated with hardware and non-Internet technology, as Page’s statement specifically mentions the X lab, Nest, Life Sciences, Calico, and Wing becoming their own companies. Google’s investment arms will also be separating from the erstwhile mothership.

Google will also be losing its leader, in a sense, as founder and current CEO Larry Page will step up to run Alphabet. Meanwhile, Google’s former product chief Sundar Pichai will step up as CEO. Google seems to be in great hands, though: Pichai was one of the key players in the development of both the Google toolbar and Chrome, two crucial components of the company’s growth. Pichai also oversaw the development of Google apps including Gmail.

Despite all of this, Google is still far and away the largest player in Alphabet’s roster, and certainly the most well-known. So what remains for Google going forward?

  • Google Photos: Page specifically mentions Google’s new photo-sharing platform as staying with the company, which makes sense. Photos is an extension of Google’s social network platform, and the reception to the service has been generally positive so far.
  • Google Now: Page also indicated that Google Now, an intelligent personal assistant a la Siri, will remain part of the Google brand. Given Now’s integration with Google Search and Chrome, it is logical that it would remain a Google property.
  • YouTube: Things are a bit fuzzier here. In the announcement, Page notes YouTube as being one of the more successful ventures under Google, specifically praising CEO Susan Wojciki. This doesn’t give any indication that YouTube would become its own company, but given Google’s focus on Internet and advertising, it seems likely that YouTube will remain under Google proper.
  • Android: Google’s popular operating system has been an effective missionary for the brand, bringing Google apps and services to millions of mobile users. There is no reason to think Android will not continue to function as part of Google.
  • Google’s various Web-based projects, such as Maps and Chrome, will certainly stay.
  • DeepMind: An artificial intelligence company acquired by Google in 2014, DeepMind is researching the nature of intelligence and how to instill learning processes in an AI. As a cornerstone of this research, the company has developed a neural network that can learn to play video games. So far, the AI has demonstrated the ability to learn and improve at basic arcade games such as Breakout.

Given the resources remaining at its disposal, Google should have no worries about its financial future. Advertising through search and YouTube accounted for approximately 89 percent of Google’s revenue last year, so losing divisions like X and Life Sciences — the so-called “moonshot” projects — should hardly make a dent in Google’s finances. If anything, Google may be more efficient from here on; for a company whose revenue came mostly from advertising, eccentric investments like robot cars may have been tough to sell to investors. Unburdened by passion projects, Google should be free to focus on increasing its already titanic revenue stream.

Fiber

Google’s experiment with high-speed Internet service has been one of its most high-profile projects since launching in 2010, inspiring towns across America to go to bizarre lengths to become Google Fiber test cities. Hell, Topeka went so far as to temporarily dub itself “Google” in hopes of attaining Fiber. It’s not surprising how fervent people’s attractions are, given speeds up to a gigabit (1Gb, or 1,000 Mb) per second. For comparison, the average connection speed in the United States is 8.7 Mbps.

Currently, Fiber is operating in three cities: Kansas City, Austin, and Provo, Utah. The company plans to expand to six more cities in the coming year, the largest of which will be San Antonio. As with many of the Alphabet companies, it remains to be seen what effect the restructuring will have on Fiber. The company has maintained a fairly conservative reach so far, but if its business model proves to be effective, it wouldn’t be strange to see the company spread nationwide. Traditional broadband services have become targets of irritation and lampooning in recent years due to their monopolistic tendencies and lackluster service. If Fiber is successful, it could shake up the entire industry.

Next page: Medicine

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