Introduction To Google’s Holding Company, Alphabet

In October of 2015, Google formed Alphabet, a holding company meant to put all of its various projects under a singular organized banner. Included among the myriad ventures were a moonshot lab, venture capital arms, a division for life sciences, and the core Google service itself. Through Alphabet, each arm is meant to operate under the same umbrella despite having their own CEOs.

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Alphabet has not been in the public conscious much despite this being such a major move. For many, Google is only recognized as an internet search service. On those grounds, Alphabet resulted in little change. This was true even of the inner workings of the main Google office, especially given the promotion of existing executive Sundar Pichai to the branch’s overall CEO.

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Alphabet was always intended to help the core Google leadership keep focused on where the company and its projects would head in the future. There are a wealth of consumer projects always being worked on within the company, many of which are to be unveiled in October of 2016. Always pushing boundaries, forward thinking products such as smart contact lenses are just one example of what’s being cooked up behind Google’s doors.

All of the branches of the company without Google directly in the name have shown a more marked change in the first year of Alphabet however. It has harbored a significant shift in the dynamics between company employees and inner workings in particular. The effects have been mostly positive, as showcased by previous Google CEO Larry Page’s new role as an experimental guru of sorts. It seems Alphabet is deeply committed to helping each of the disparate arms of the overall Google brand excel across the board.

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CFO Ruth Porat has reported on some potential downsides to the holding company’s effect on basic operations however. In one notable example, it seems that keeping the reigns on effective cost management has become more strained as of late. Some employees are feeling as if their ambitions are more stifled than they were promised due to the often imposing bottom line.

Smart device manufacturer Nest has been feeling the heat in particular. Under the banner of Alphabet, they have been forced to cut more and more costs. This is just one example of several growing pains within the new Google structure, but such things are to be expected in the world of business. Only time will tell if the initial ambition of the holding company’s purpose will gain its footing.