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- Industry
- Geography
Alphabet is an American holding company founded in 2015 to house Google and all of its web-based properties, as well as the increasingly diverse real-world ventures the Internet behemoth was swelling to encompass, from driverless cars and life-extension research to high-speed Internet. Google co-founders Larry Page and Sergey Brin created Alphabet as part of a bold restructuring through which they hope to nurture Google's multifarious ventures into significant businesses, rather than hobbies that drag on Google's earnings. Alphabet, like Google, is headquartered in Mountain View, California, and helmed by Page as CEO and executive chairman (and former Google CEO) Eric Schmidt. Alphabet is no small gamble: Not all of its futuristic ideas will work, and visionary leaders may not be in large enough supply. But Page and Brin's willingness to reinvent themselves according to their growing ambitions almost 20 years into Google's existence is a model worth studying for people looking to create big change in the world.
The majority of Alphabet's revenue is generated from advertising. The company offers performance advertising, which allows advertisers to connect with their users with measurable results. It also sells brand advertising, which aims to enhance users' awareness and affinity with brands. Advertising is thus a core part of Alphabet's strategy and has guided many of its acquisition decisions, such as the purchase of DoubleClick in 2008. However, Google also generates revenue from other sources, including sales of apps, in-app purchases, hardware, and licensing and service fees, including those received from Google Cloud and other products. The company has made acquisitions to bolster these businesses.
The companies owned by Alphabet are:
Boston Dynamics builds advanced robotics, most of them mimicking animal-like behavior, such as Spot, its dog robot. Google bought Boston Dynamics in December 2013, but currently unclear whether Alphabet will take control of Boston Dynamics, or if it will stay as a part of Google.
Calico, or the California Life Company, was the arm of Google concerned with combating aging and associated diseases. It was founded by Google and Arthur D Levinson in 2013. Calico is one of the main areas of interest for Brin and Page. Interestingly, Levinson – the current CEO – is also chairman of Apple.
Formerly Google Capital, Capital is a venture-capital fund that focuses on companies in the late stage of growth. It only invests for profit purposes. If Alphabet starts swallowing up smaller companies, it'll be doing it through Capital.
DeepMind is Google's artificial intelligence and general-purpose learning algorithm company. Founded in 2011, and bought by Google in 2014, the UK-based company has been hard at work behind closed doors. Beyond the hallucinatory Google Deep Dream project, it's largely a mystery what it's been up to. It's unclear if DeepMind will be spun out into a separate company under Alphabet or whether Page considers it to be one of Google's "internet products".
Just like its Americanised spelling, Google Fiber is a US-only company. While Fiber is known mostly for delivering fiber-to-the-home 1Gbit/sec internet, it also helps low-income homes connect to the internet with a free 5Mbit/sec package. While I'd argue it's still connected to Google's internet products, its focus is infrastructure rather than web-based services, so it does make sense that Alphabet has taken control of Fiber.
All hail the great and mighty Google, the search engine that most of the Western world now centers around. Google is the largest company in Alphabet and will retain control of most of the products you're already familiar with. Now under Sundar Pichai's control, Google will run products and services such as search, ads, maps, apps, YouTube, and Android. Yes, that's right, both YouTube and Android will stay under Google's watchful eye. We don't yet know whether Google's Project Fi will spin out into a separate part of Alphabet or stay under Google.
Now, this is an interesting one and one that's fully speculative. For those unaware of HBO's hit comedy series Silicon Valley, Hooli is the name of the company founded by the fictional band of Californian developers. Hidden away in Page's announcement message is a hidden link to hooli.xyz.It's most likely an in-joke – hooli.xyz is the fictional company's out-of-the-box-thinking division and shares the same domain as Alphabet's new abc.xyz URL – but perhaps Hooli could be the name of Alphabet's proposed drone-delivery company, which is currently in the incubation phase at X Lab.
Previously part of Google X, Life Sciences does what it says on the tin. This isn't about researching health, like Calico, but understanding living organisms and biosciences, perhaps with a mind to help fuel Calico developments. It's here that research for Google's glucose-monitoring contact lenses started out. It's unclear whether its role and focus will shift under Alphabet, but as a separate company, it can only flourish more.
Nest Labs was Google's home-automation and Internet of Things company. It will remain largely the same under Alphabet, with Tony Fadell remaining CEO. Nest is responsible for creating the Nest thermostat, Cam, and carbon-monoxide detector Protect. Fadell is also responsible for looking after Google's Glass project, but it's unclear whether that will be part of Nest or still under X Lab's gaze.
Ventures is another venture-capital arm of Alphabet and, unlike Capital, it invests mostly in startups, looking to support them through seed, venture, and growth stages. Ventures have always operated as a separate company to Google despite sharing the same name, so it's no surprise that it's now under Alphabet. Interestingly, many companies funded by Ventures have gone on to be acquired by Google.
Formerly Google X, X Lab is where the really cool stuff at Google happens. It's where Google Glass started out, the self-driving car was born, Project Look took off and various other "moonshots" happened. Basically, X Lab is Alphabet's top-secret research laboratory, and where – if Alphabet planned to become Skynet and wipe out humanity – it would probably start building Terminators.
Alphabet also is constantly looking for novel technologies that can enrich its portfolio of businesses. The company recently acquired fitness technology company Fitbit.6 Acquiring smaller companies often eliminate emerging rivals, thus reducing competition for Alphabet. This is one reason Alphabet is currently the target of an antitrust lawsuit that was filed by the U.S. Department of Justice (DOJ) and eleven state Attorneys General in October 2020. Alphabet also is constantly looking for novel technologies that can enrich its portfolio of businesses. The company recently acquired fitness technology company Fitbit.6 Acquiring smaller companies often eliminate emerging rivals, thus reducing competition for Alphabet. This is one reason Alphabet is currently the target of an antitrust lawsuit that was filed by the U.S. Department of Justice (DOJ) and eleven state Attorneys General in October 2020.
