Why Google — and Larry Page — created their own Alphabet

August 13, 2015
Letters spell the word "Alphabet" as they are seen on a computer screen with a Google search page in this photo illustration taken in Paris

Letters spell the word “Alphabet” as they are seen on a computer screen with a Google search page in this photo illustration taken in Paris, France, August 11, 2015. REUTERS/Pascal Rossignol

With the launch of its new holding company, Alphabet, Google is trying its hardest not to be Microsoft. And Chief Executive Officer Larry Page is signaling that he does not want to be Bill Gates.

The software startup that Gates founded morphed into a tech giant and gradually took over nearly every computer desktop in the world. Its core products — Windows, still the dominant desktop operating system, and productivity software like Office, which made computers invaluable to office workers — minted money. With this cash flow, Microsoft funded a research arm that attracted the smartest engineers and scientists looking to do blue-sky projects.

Then the Internet took over. Bill Gates went off to fight malaria and to save the world. Microsoft receded slightly into a comfortable existence as an industry behemoth that did extremely well but no longer pulled in the brightest minds. Those computer scientists were accepting jobs somewhere else: Google.

A tech CEO told me this week that hiring the best engineers creates a network effect. They want to work with the smartest people on the best projects, and the more of them a company attracts, the better projects it can tackle — leading to more top people joining the company. That’s one reason why Seattle became a hub of tech companies like Amazon; Microsoft, which is based in Redmond, Washington, had done the groundwork by luring so many techies to town.

Google remains one of the coolest companies on earth, measured by the number of people clamoring for jobs there. For the last six years it’s ranked number one on Fortune’s list of the best companies to work for. The company has set the bar for perks that techies in San Francisco, Silicon Valley, and elsewhere now consider standard, like the legendary free cafeterias that offer chef-designed meals for all employees. But Google is not the only hot company, and it faces hiring competition from Facebook, Twitter, and a phalanx of newer startups. This is especially true as Googlers leave to start their own new companies.

Keeping a company on the cutting edge is about more than making workers happy. They have to feel relevant, heard and purposeful. One of the best ways to imbue work with a sense of purpose is to make people feel as though they are changing the world. Google’s wackier projects have the potential to be earth-shaking: driverless cars could reinvent the way we get around; even the much-mocked Google Glass might turn out to be amazing in the next iteration. The Calico life-extention project — which focuses on aging and age-related diseases — represents a push toward the holy grail of all technological research.

Commentators have noted the silliness of the name Alphabet and its abc.xyz domain. That’s not the point; Google is a pretty silly name as well. The message behind the reorganization is that Google is trying its hardest not to become irrelevant or complacent. Page and his co-founder Sergey Brin are aiming to prevent the company from missing out on the next major tech trends. If it puts too much focus on its search and advertising businesses, which make money, to the exclusion of new products, Alphabet risks failing to invent the next amazing product or service that will change the way we live the way Google search did.

The concept behind the reorganization seems to be anointing several non-search divisions as equally important as the core Google business. That’s just optics, because the company will continue to make its money in the same way for the near future. The most important change is in Page’s role, which is shifting to a spot at the top, with Brin, of the new Alphabet entity.

By formalizing a structure that gives weight to its most out-there, passion-project research, Page is inviting the coolest and most innovative engineers to come work for him. He’s saying that he does not know, as no executive ever does, what his company’s next big product will be. Prioritizing and separating old-school Google from the idea-factory divisions of the company may help ensure he gets the people he needs to make that next idea as big as his search breakthrough.

 

 

4 comments

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Google does not pay its people very well and they try to make you work lots of overtime. It has turned into a slow stupid giant corporation.

Posted by chzwiz007 | Report as abusive

Both Microsoft and Google have come to dominate fields already opening by startup innovators. Before Windows there was Smalltalk, before Google Search there was Altavista, …
But Google has a much better record of entering with a superior design and implementation, and “attractiveness” than Microsoft with often rather mediocre “me-too”s.
Three big wins so far for Google – Web search and responsive advertising; Web tracking and big data for closely targetted advertising; Android mobile with Google APIs and Play Store for leveraging Internet and Cloud activity.
Next is probably the Android mobile as “remote control” for “life accessories” such as payments, car, home entertainment, home device control of heating, washing machine, oven security; and “health assistance” for the sick or aging.
To paraphrase Reagan, “We are from Google, and we are here to help”.

Posted by Neurochuck | Report as abusive

Google has become a bit of a USG pariah with NSA, Chrome etc – its just a name folks – movie @11

Posted by jackdanielsesq | Report as abusive

Alphabet

Definition: The men who gamble at my feet as I hang crucified on the cross for trying to save the world; Your lives.

Now you will rot in hell; You can count on that.

Game over; Eye win.

Love
Omega

Posted by Lovetwo | Report as abusive