Tuesday, August 11, 2015

Chairman Larry (Chairman Mao): Larry Page's Dramatic Corporate Overhaul

This is awesome. Other than the fact that Indians are clearly taking over the world, I must say the Google corporate structure and culture are pretty impressive inventions in their own right. And this just adds to the genius of it. I am not sure you can call this overhaul. It is more like the cactus flower popped up open.

ONCE YOU GET YOUR HEAD AROUND IT, GOOGLE'S MIND-BENDER OF AN ANNOUNCEMENT MAKES PERFECT SENSE. ........ It has long been obvious that what got Page excited wasn't sitting in meetings about incremental improvements to Google search, Gmail, or YouTube. ...... wants to boil new oceans, such as transportation, connectivity, and life itself. ..... Page has been grooming Pichai to be Google's CEO. ...... The key thing is to have the right mix of projects, and to think about, "Maybe I can take on more projects." ...... Page has been contemplating the move he announced today for years ..... The Google brand is among the most resonant ones on the planet, and Page says that Alphabet won't even be a consumer brand. ...... 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.
G is for Google
From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have. ..... We did a lot of things that seemed crazy at the time. Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super excited about. ..... We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant. ...... In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. ...... We will rigorously handle capital allocation and work to make sure each business is executing well. We'll also make sure we have a great CEO for each business, and we’ll determine their compensation. In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole. ......

Sundar has been saying the things I would have said (and sometimes better!) for quite some time now

..... frees up time for me to continue to scale our aspirations. ........ Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure. ...... 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.

With Google as Alphabet, a Bid to Dream Big Beyond Search
Google’s expanding universe of products, which are as varied as operating systems, a web browser, email, cloud storage, self-driving cars and, yes, even a search engine. ...... Mr. Page’s announcement on Monday that Google will restructure its operations into a General Electric-like conglomerate called Alphabet, of which the search company will become just one division. ...... By creating a half-dozen (for now) adjacent companies that are each dedicated to solving a technological problem, the structure allows for both tactical narrowness and strategic breadth. ....... it is peerless in the industry as an exporter of corporate culture. Google pioneered what has become the archetype of the modern Silicon Valley company — an engineering-driven culture in which internal hierarchies are suppressed, empirical evidence is prized and people are given wide leeway to work on problems that excite them, even if they seem far removed from a central corporate mission. ....... Tech founders increasingly argue that every sector of modern life, including health care, transportation, media and education, will be improved by the liberal application of computing technology.
Google Creates Parent Company Called Alphabet in Restructuring
Google said Monday it had created a holding company, Alphabet Inc., that will manage each of its growing cast of businesses, including those building robots and self-driving cars, helping to cure disease, developing nanoparticles and extending Internet connectivity via balloons. ..... a structure similar to Warren Buffett’s Berkshire Hathaway Inc. ...... Mr. Page said he looks to Berkshire Hathaway as a model for running a large, complex company, according to people who were at the meeting. ...... Google has jumped into dozens of new businesses in recent years, but it remains primarily an advertising company, generating most of its revenue and nearly all of its profit when people click ads in search results. Researcher eMarketer estimates that

Google ends up with one in 10 dollars spent on advertising globally, about $53 billion this year after paying back its partners.

...... Non-Google units will include Nest, the connected-home business run by Tony Fadell; Fiber, Google’s fast Internet service; Calico, the health research lab headed by Art Levinson; Google X, the company’s research lab that pursues long-term risky projects like the self-driving car; Google Ventures, its venture-capital arm; Google Capital, a late-stage investment unit; and Sidewalk, a recently formed urban technology project headed by Dan Doctoroff.

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