trump1-061615
Alphabet is the new holding company where companies in the launch phase and in "non-core" sectors such as energy, cars, transportation and much more will converge. The reasons for this very important move in my opinion are 4:
1. Wall Street rules
The enormous system of the parent company Google Inc. houses the enormous advertising revenues of AdWords, but also the enormous development and marketing costs of loss-making businesses such as Motorola, Google Now, Plus, Google Glasses, etc.
The spin-off of the different businesses into 2 companies (Google Inc and Alphabet Inc) will allow Google Inc to relaunch the healthy and profitable part of the company, namely the advertising one, probably increasing the value of the stock in the medium term, increasing the interest of Wall Street which has already shown to appreciate it in the short term. In short, a pure cosmetic surgery action as defined by Evgeny Morozov (@evgenymorozov) on Internazionale on 21/8/15.
Source: Bloomberg- Google stock market after Alphabet announcement
Source: Bloomberg- Google stock market after Alphabet announcement
2. Google Monopoly and Candidate Donald Trump
In the United States and Europe, questions canada telegram phone number list hot about Google's dominant position in text search: Google search, YouTube, and Maps are effectively 3 search engines.
If we add up the market share on specific verticals, Google is effectively a monopoly in the United States, thus it risks being split by the next possible Republican administration of Bush or Donald Trump (the Republican candidate favored according to Google's search data in the United States), exactly as happened to the oil giant Standard Oil . In this sense, it will be interesting to observe which verticals will be assigned to Alphabet and which will remain with the parent holding Google Inc.
3.Too big to drive innovation?
Over the years, Google Inc. has acquired many companies in several promising industries (a limited selection is shown in the image below):
google-acquisitions (00000002)
The organizational machine of Google Inc. today has tens of thousands of employees in 40 countries around the world: the company is growing, the bureaucracy is increasing and like every giant, Google Inc. risks losing the innovative impetus that gave birth to the most famous search engine in the world, and becoming the next Microsoft or IBM.
This is also the official reason given in Larry Page's letter , and I personally believe that it has a basis in truth and is not simply an apparent excuse.
