As of the end of yesterday’s business day, Google is officially a subsidiary of Alphabet. Of course, for most of us, nothing has changed. But this restructuring of the conglomerate means greater transparency for its shareholders and perhaps a move towards streamlining its businesses.
Google started off as an internet business which helps people search things on the internet, to put it simply. It instantly became extremely lucrative as instantaneous as its search engine and Google now owns Android, YouTube, Maps, Ads and Search, to name a few.
On top of that, under its wings are many ambitious but not yet profitable projects like self-driving cars, smart cities, internet-connected high-altitude balloons and glucose-monitoring contact lenses.
Such variety of dabbling in strikingly different industries, coupled with the tech giant’s overall reluctance to share details about its businesses, has made its investors very fidgety. By making Google a subsidiary of Alphabet, Larry Page and Sergei Brin now have more room to invest in more by-products, which may be the long-term vision for the company.
Besides, by divorcing the other business units from Google, they can be placed for IPO on their own when fundings are required in the future.
Hence, Sundar Pichai is the new CEO of Google and will keep running its operations which comprise of all its advertising and internet business including YouTube. Meanwhile, Page and Brin are now free to explore any innovative projects that take on their fancy, which many hope may indeed save lives.
On the other hand, Google’s new corporate restructuring raises questions about its future as a conglomerate as we see more technology companies dabble their hands in varied industries like Facebook and Amazon. Will the internet giant have to hive off its divergent businesses like some of the older technology firms have done? Or will the investors be satisfied with its sprawling structures as it is now? Time will tell.
