AppleMagazine - August 21, 2015 USA.pdf

Basically, Alphabet is a new holding company
that will now have Google as its biggest wholly
owned subsidiary. Alphabet will have many
other subsidiaries, of course; however, entirely
fittingly given this structure, they will have
very different aims to Google, which will now
return closer to its 1990s roots as predominantly
a search company rather than a technology
corporation. On the front page of Alphabet’s
website, Page describes the new Google as “a
bit slimmed down”, but set to become “even
better through greater focus”.
Given the manner in which Google has, over
many years, expanded into a high number of
different, previously unexplored markets in
an apparent bid to keep pace with formidable
tech rivals like Microsoft and especially Apple,
the restructuring under Alphabet certainly
seems rational. Various unorthodox ventures
previously embarked on under the Google
banner, including the broadband division
Fiber and investing operations like Capital,
will now be run separately - but still under the
watchful eye of Alphabet. Page has expressed
his company’s belief that “this allows us more
management scale”.
SHOULD INVESTORS REALLY
BE CHEERING?
So, that’s precisely how Google will be changing.
The stock market has certainly given its stamp
of approval, with a sharp 5% increase in
the value of Google shares in after hours
trading. Julian Birkinshaw, Professor of Strategy
and Entrepreneurship at London Business
School, has noted that it is “understandable”
for investors, eager for more detailed insight
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