In his blog announcing the creation of Alphabet, Google Cofounder Larry Page said the holding company structure will allow the company to independently manage unrelated businesses headed by strong CEOs and make the core Google search business better through greater focus. Marketers whose search strategies depend heavily on the company should be heartened by the news, observers say.
“This means [Google managers] can expand what they want to do as a business entity. I would think the move would serve marketers better in the long run,” said Thomas Ordahl, chief strategy officer at the WPP-owned branding agency Landor Associates. “Last week Google was a product brand, a consumer brand, a B2B brand. In the case of the core Google business, they can now focus more clearly on the needs of the people who pay the bills.”
Structurally, Alphabet gives the company the wherewithal to innovate without drawing from or casting a shadow on the core business, said Alex Lirtsman, chief strategist at digital agency Ready Set Rocket. “Google is a search engine and it’s also a venture fund. This allows them to say, ‘We’re a long-term venture fund, but we’re not going to be focused on what the quarterly numbers look like to affect what we’re doing,’” he said.
The institution of Alphabet, for instance, better positions the company to reintroduce Google Glass as an industrial product. “They will be able to push innovation fast with less attention from shareholders. It resets the playing field and gives the core product a little breathing room to innovate, as well,” Lirtsman said.
Page had high praise in his announcement for Sundar Pichai, who becomes CEO of Google in an Alphabet world. “Google itself is also making all sorts of new products, and I know Sundar will always be focused on innovation—continuing to stretch the boundaries,” Page wrote.
David Rodnitzky, CEO of the Silicon Valley agency 3Q Digital, doesn’t think the move will have an immediate impact on marketers. He sees it as a management, not a marketing, move: “AdWords has tons of engineers and product managers busily working away on a myriad of new features. I think this change is more about creating focus for senior executives than it is about making AdWords better, worse, or more or less important.”