BMW said on Tuesday it was looking into whether Google infringed any trademark rights after the technology giant set up a new parent company called Alphabet, which is also the name of a BMW subsidiary. In a blog post announcing the change, Page said that Google is “operating well today, but we think we can make it cleaner and more accountable”. Google itself becomes a much smaller, or “slimmed down” company under this new arrangement.
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Going back to Alphabet, Page described it as a collection of companies with Google as the largest, focusing on internet products. “Only time will tell, but perhaps separating Alphabet’s speculative projects will also prevent these “emerging businesses” from using core Google as a seemingly unlimited tap for new resources”. This includes Google X, which makes things like the self-driving auto and is working on a drone delivery service. Google founder and CEO Larry Page will lead as the Alphabet CEO while co-founder Sergey Brin will be its president.
And finally, Page remarks: “Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I’ve been tremendously enjoying our work together”.
The announcement on Monday of the new corporate structure was generally welcomed in Silicon Valley and on Wall Street, where Google shares shot up some 3.6 percent in early trade on the news. “It is easier to make the case to regulators that companies are separate entities if they only share an owner rather than being run as one huge super-brand”. Stepping into the role of CEO at Google is Sundar Pichai, who is has been heading the engineering department and acting as Page’s lieutenant since October. Legally speaking, though, that’s where Alphabet – as it gets bigger and more powerful – will need to tread carefully. Page and Brin are likely banking on more investor support with the restructuring, though – on quarterly reports, Alphabet will now be able to report the performance of its divisions separately, showing off the strength of individual projects while explaining away the weaker ones. Each of these businesses will have its own CEO and business strategy.
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Google’s previous set-up reportedly does not emphasise or allow new waves of product development as compared to what Alphabet can do.
