A to Z of why Google’s becoming Alphabet

BENGALURU: Most would have heard of Google's self-driving cars, and the Google Glass. Some would have heard about its efforts to build drones that can deliver stuff. But these are just three of the many things that the company is today working on, including an ambitious biotech effort to "conquer death".

So, one way to look at its new moniker, Alphabet, would be to think of it as working on everything from A to Z. One unofficial, user-generated web tile actually puts together a Google initiative for each letter of the alphabet, from Analytics and Books to YouTube and Zeitgeist; 'J' was the only letter for which it could not find something.

The new corporate structure — where Google is just one venture among several under the Alphabet holding company — is designed to give the emerging spaces, and their top executives, more breathing space to build their businesses. It will also give investors better visibility into the core business of search, something that investors love, and which was reflected in a 6% surge in Google's share price soon after the announcement was made.

Search is what today brings in most of the money for Alphabet. But Alphabet is, as noted earlier, already much more, and it probably wants to be a lot more, given the way its fundamental internet, analytics and machine-learning technologies are reshaping literally every aspect of the world.

Early last year it bought the smart-thermostat maker Nest Labs for $3.2 billion and that initiative is becoming the base of Alphabet's work in the area of internet-connected devices for the home.

Calico is an anti-aging biotech company that it launched in 2013 with Arthur Levinson, former CEO of biotech pioneer Genentech, leading it. It is Google's ambitious effort to conquer death, as some have put it.

Fiber is an initiative to lay fiber lines to provide extremely high-speed broadband internet and cable television, and as of March, it had 27,000 television subscribers in the US. Sidewalk is a venture that's focused on building smart cities, an attempt to improve city living. And then there's Google X that has a number of projects, some of which remain extremely secret. Co-founder and CEO Larry Page said the whole point of Alphabet was that the different companies should have independence and develop their own brands.

The company also said it would become possible to focus on Google as a product even more than before — Google now includes search, advertising, maps, YouTube and Android. And at the same time for Google/Alphabet to better support its other businesses and moonshots.

A number of publications quoted investors as saying that the new structure would be cleaner and more accountable. "Wall Street more easily would be able to separately value the core business, using a multiple of its earnings, from the investment operations," The Information quoted a hedge fund manager as saying.
Source: TOI