Google restructures business into ‘Alphabet’ conglomerate

Posted on 12 Aug 2015 by Michael Cruickshank

Search engine and technology services company Google announced yesterday an unprecedented restructuring of its business.

The company has announced that Google will no longer exist as an independent business, but rather become a wholly-owned subsidiary of a new conglomerate which it is calling ‘Alphabet Inc.’.

Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet.

Google has made the decision to restructure its business due to the increasing diversification of its business scope.

While in the past it only focused on products related to its core search and tech services business, it has now branched out into a number of new fields, including biotech, aerospace and financing.

Following the restructuring, the Google brand itself will continue to exist in a streamlined fashion, encompassing many of the well known Google products such as search, maps, and Android.

“This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead,” explained Larry Page, now CEO of Alphabet.

These other divisions moved outside of the Google brand will include Life Sciences, the company’s biotech research arm, as well as Calico, a division focusing on human longevity.

In addition to this, the company’s moonshot research and development lab, Google X, which gave birth to many of the Google’s well known projects such as ‘Wing’ and “Loon’, will be restructured and lose the Google affix.

Furthermore, recent acquisitions by Google such as Internet of Things company Nest will also be separated from the Google brand.

Moves towards more traditional manufacturing

This massive change to the company’s structure sets the scene for it to morph into a full-scale conglomerate providing much more than just traditional tech services.

One field the company is likely to become involved in is manufacturing, as many of its new systems, included Nest, Wing and its autonomous vehicles, will require custom built hardware.

Such an expansion also sets the stage for yet greater profits for Alphabet, as it would sell not just software and advertising services, but also the hardware that runs them.