Google makes a legacy switch
Question is will the Pichai era be as momentous as the Page-Brin one
were anxious that Google was pouring money into long-shot projects that might never pan out and diluting the earnings potential of Google’s cash-minting businesses. Creating the Alphabet structure let the company put all those projects into a money-draining box — the “here be dragons” portion of the company’s P&L — and spotlight the earnings power of Google’s mostly advertising-focused businesses.
The idea was that Page and Brin could focus on the big picture and leave the dayto-day stuff to Pichai and others.
But shielding Google from those “other bets” such as driverless cars no longer seems so urgent. Alphabet and other tech titans — particularly those effectively controlled by their founders — have a relatively long leash from investors to invest in both the projects that generate earnings now and on whatever comes next. Amazon, for example, spent $14 billion to buy a niche grocery store chain, and it’s investing in far-flung businesses such as health care and entertainment.
Amazon has always received a longer leash to tinker than most other companies, but I think Google’s cash firepower also lets it experiment without creating an artificial structure to shield Google from its less mature corporate cousins.
There may be a reason that Alphabet never became a blueprint for other technology companies that wanted to keep up with the times. They could keep up with the times, or not, without the blueprint. It is a credit to Page, Brin, Pichai and many others that Google has outlasted all predictions of its doom. It was a popular Silicon Valley parlour game a decade ago to say that Google would be rendered irrelevant by the smartphone age.
No one would need to search in the app age, the thinking went. Google would become the next in the long list of technology companies that couldn’t escape revolutionary technology changes. Google defied the odds and made that leap across the evolutionary gap. The next challenges for the company are technological, political and cultural. They’re just as existential as the last challenge of keeping up with an evolutionary technology shift. And now we’ll see if Pichai, and the structure Page left him, are up to the task.