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Behind The Brand

The Invention Of Alphabet Is The Ultimate Larry Page Move

Once you get your head around it, Google's mind-bender of an announcement makes perfect sense.

[Photo: © Jeff Chiu/AP/Corbis]

When a coworker shared the news that Google was creating a new holding company called Alphabet and splitting off all its non-core activities from the Google brand, I reacted in the only rational way: I wondered for a nanosecond if it was a wonderfully wacky hoax. Then I checked the URL on Larry Page's blog post, in which he explained the rationale and announced that longtime Googler Sundar Pichai would become Google's CEO. It seemed to be legit.

And then it didn't take long at all before the news began to sound less like fantasy and more like exactly the sort of thing Larry Page would do.

It has long been obvious that what got Page excited wasn't sitting in meetings about incremental improvements to Google search, Gmail, or YouTube. Page, who cofounded Google with Sergey Brin in 1998, wants to boil new oceans, such as transportation, connectivity, and life itself. Many a doubter has asked how such efforts relate to Google's mission and primary operations in their classical form. Now Page—if he ever grants another interview—can reasonably respond: "They don't!"

Anyone who's been paying attention also knows that Page has been grooming Pichai to be Google's CEO. Creating Alphabet allows Page to give Pichai the job without pulling himself away from the parts of Google he's passionate about. And other hotshot executives—ones currently at Google, or yet to be hired—will presumably like Page's statement that Alphabet's big businesses will be run by their own CEOs, without much interference from Larry or Sergey.

Page could have pulled off much of this without introducing a new corporate moniker or turning Google into (my fingers still have trouble typing these words) a wholly owned subsidiary. But as he reminded us in his blog post, Google went public in 2004 with the declaration, "Google is not a conventional company. We do not intend to become one." It's in the company's nature to do deeply idiosyncratic things that sound at first blush like they might be a prank or a mistake.

In 2013, I interviewed Page for a Time magazine cover story. In one snippet of our conversation that didn't wind up in the article, he said he spent a lot of time making Google products and services work well together, and that in some ways it was easier to oversee disparate enterprises than ones that were closely related. Page told me:

You don’t want to have 25 different ways to share something or 18 different ways to have a photo of yourself, things like that. There’s some integration to do, which is difficult work. Making them work well and allowing us to innovate . . . that’s a conversation that can’t have infinite scale. I spend a lot of time doing that, my team spends a lot of time on that.

On the other hand, I think there’s things we do that don’t require a lot of integration currently. Project Loon [Google’s project to deliver broadband by balloon] doesn’t require a lot of integration right now. The key thing is to have the right mix of projects, and to think about, "Maybe I can take on more projects."

It’s kind of counterintuitive, but maybe you can actually do more projects that are less related to each other. Normally in a business, you think about, "What’s the adjacent thing that I can do?" because that’s where you must have experts.

According to Business Insider's Jillian D'Onfro, Page has been contemplating the move he announced today for years, which means that it isn't surprising that what he was saying almost two years ago is perfectly in sync with the corporate restructuring announced today.

How much effect will the invention of Alphabet have on Google's businesses? It's too early to say, and it's possible that the bottom line will be subtle rather than epoch shifting. For one thing, Page has never acted like he felt that Google was pigeonholed by the prior arrangement. (If there are projects that he's dolefully rejected for being too grandiose or insufficiently related to the organization of information, I'd love to know what they were.)

In the age of Alphabet, Page will still run a publicly traded company involved in a dizzying array of activities—many of which, though admirably audacious, don't make money and may or may not ever amount to anything. Page will still face skepticism from investors and others who think that he is running an outfit that is trying to do too much and isn't appropriately focused on the cash cow at its core. Adversaries ranging from persnickety government agencies to other tech behemoths will be no more likely to give Page's company the benefit of the doubt. It's just that this company won't be called Google.

I don't expect human beings not employed by Google to divide up Google and Alphabet's operations into neat mental buckets. The Google brand is among the most resonant ones on the planet, and Page says that Alphabet won't even be a consumer brand. A few years from now, people will surely be talking about "Google's self-driving cars," even if they theoretically have nothing to do with Google.

And when Larry Page does the kind of things that Larry Page does, nobody's going to describe his behavior as "Alphabet-y." Whatever the name of the company he runs, he will continue to define what it means to be Google-y.

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