'Okay Google', why don't you even own domain name Alphabet.com?
In a surprising move, the technology titan on Monday announced that it is now rebranding itself as Alphabet – a new holding company whose largest wholly owned subsidiary will be Google.
“Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey [Brin], as President,” Google co-founder Larry Page wrote in a blog post.
“What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google,” says Page.
But before we get into other details, get this. Even as it has taken a big bet in becoming the Alphabet, Google doesn’t own the domain name Alphabet.com – that belongs to a UK-based fleet management subsidiary of the BMW Group.
And while we bet Alphabet.com will be seeing an unexpected surge of visitors over the next few days at least, you wouldn’t guess the domain name Google has chosen for its parent.
It’s abc.xyz. Seriously. (Click here to go to the ABC page)
Even on Nasdaq, ABC is the trading symbol for an entity called AmerisourceBergen Corporation, and while we’re sure not many are going to mistakenly invest in it thinking they’re buying into GOOGL or GOOG, there remains scope for confusion.
“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, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG,” Page wrote.
“For Sergey and me, this is a very exciting new chapter in the life of Google – the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity's most important innovations, and is the core of how we index with Google search!
"We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive for! I should add that we are not intending for this to be a big consumer brand with related products—the whole point is that Alphabet companies should have independence and develop their own brands.”
Stranger things have happened, but let’s get back to why (just why) did Google think this was a good idea.
‘Okay Google’, tell me why?
Page suggests that Google was becoming too diversified for its own good, and having a plethora of scarcely related businesses were making it a rather fat animal.
“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. What do we mean by far afield?
"Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” he wrote.
So what will Alphabet’s key focus be? New start-ups like drone delivery and funding new ventures, among others, says Page.
“Sergey and I are seriously in the business of starting new things. Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure,” he says.
That all sounds good, but ‘Alphabet,’ seriously?
As Page concluded his blog post, “Don’t worry, we’re still getting used to the name too!”