The announcement Monday that saw Google reorganize under the banner of new holding company Alphabet was Big News, we all seem to agree, but it’s much less clear exactly what kind of Big News it is.
It’s going to keep investors happy by segmenting some of Google’s wilder moonshot projects out of the main earnings figures, according to the Verge. Or maybe, says the Guardian, Google wants to make itself a smaller target for the European regulators it’s currently battling.
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Realistically, the consensus is that there aren’t going to be any earth-shaking consequences of the Alphabet reorganization in the immediate future, whatever the eventual implications are. Still, the shift puts Google/Alphabet in an excellent position to diversify, according to Larry Chiagouris, a professor of marketing at Pace University’s Lublin School of Business.
“Procter & Gamble has been doing this for several years,” he told Network World. “Its key brands such as Tide and Crest and Charmin have been the face of its products and not the name of the company.”
This multi-brand strategy, Chiagouris said, is in line with recognized Madison Avenue strategy, a fact already being reflected in Wall Street’s positive reaction to the announcement as the company’s stock jumped by 6% in after-hours trading on Monday, post-announcement. At the flagship, however, little seems likely to change right away under new CEO Sundar Pichai.
“A more interesting question is what kind of a job will the leaders of the other branded new ventures do,” he said.
However, FCC CIO David Bray (who emphasized that he was speaking for himself as a CIO, not on behalf of the FCC) argued that Pichai’s progression from the technical side to head of the company is a sign of the times.
“Historically few CIOs have gone on to become CEOs,” Bray said. “In the past, most CIOs weren’t groomed to be future CEOs, to include having opportunities to strategically oversee about how technology impacts their entire organization beyond their ‘just IT’ impacts.”
But Pichai, who has an MBA from The Wharton School in addition to his myriad technical qualifications, is one of a new generation of leaders comfortable with both coding and board meetings. According to Bray, that’s a big advantage, given the increasingly direct relationship between technology and market viability.
“Organizational leaders need to be thinking three-or-more steps ahead regarding 'what's next' to keep their organizations lean and agile for the future ahead,” he said.
And with a renewed focus on its core search and advertising businesses, Google will likely be as lean as a tech titan can be.