Co-founders Larry Page and Sergey Brin created a collection of companies called Alphabet that let will let Google focus on search while other entities shoot for the moon.
In 1998 it wasn’t such a stretch for Google to position itself as an anti-corporate entity ready to . The company did just that, of course, to the point where its very name became synonymous with Web search. Seventeen years and tens of billions of dollars later Google has morphed into a massive global entity juggling its cash-cow search-and-advertising efforts with world-changing “moonshots” to deliver driverless cars and drone-based delivery services.
No more. that he and co-founder Sergey Brin have reorganized Google into a new collective of companies called . Essentially Page and Brin have put Google on a diet, trimming out some of the more fanciful endeavors they added over the years so each of these projects can develop independently of the larger Google brand. That means Google’s Calico anti-aging biotech unit, Google X startup incubator, Nest Internet-connected devices and several other initiatives will get their own CEOs, who can run things as they see fit. Google X is also known as the company’s “moonshot factory” because its mission is to move any idea or technology forward 10 times beyond its current state. Page and Brin become Alphabet’s CEO and president, respectively.
Meanwhile, takes the helm of Google, the largest entity within Alphabet, with the goal of advancing that company’s biggest moneymakers: search, advertising, the Android mobile operating system, YouTube, apps and maps. Pichai joined Google in 2004 and most recently served as the company’s product chief.
In an effort to find its “Act II,” Google has shrewdly used the money generated by its core businesses to invest in new technologies and projects over the years, says , a venture capitalist and general partner at Haystack Fund. “Today, Google is a very large place, and governing it smartly likely posed a challenge,” he says. Alphabet’s structure puts the company “more operationally on-par with its main competitor—Facebook—which has shown tremendous agility in buying and integrating important, new, global networks into its framework, such as Instagram and Whatsapp.”
Page and Brin are now ostensibly free to play a larger role in their company’s more cutting-edge projects. Perhaps more significantly, the plan to install CEOs to run each of these projects as individual business units gives these executives freedom in the way they hire, fire and motivate people, says , founder and managing director of venture firm Shasta Ventures.
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