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Google Bids to Make Its Sideshows into Main Attractions

Google’s rebirth as Alphabet is an attempt to prove that the company’s “moonshots” can be as successful as its Internet business.
August 10, 2015

Google founders Larry Page and Sergey Brin seem determined to prove they gave the world more than a great advertising business.

For all the self-driving cars, AI breakthroughs, and Internet balloons, ads on Web pages and inside apps provide over 90 percent of their company’s revenue. But a major reorganization of Page and Brin’s company today puts their most technologically ambitious—and in business terms, embryonic—projects on an equal footing with their profit-generating machine.

Google—comprising the search engine, ad business, YouTube, and Android mobile software—is now just one of many subsidiaries of a conglomerate called Alphabet. The CEO of the new Google is Sundar Pichai, an executive who was most recently in charge of Google’s main products and previously led work on the Chrome browser and operating system and Android.

Alphabet’s other subsidiaries—it’s not clear just how many will be—are a grab bag of attempts to shake up the world using new technologies. They include the anti-aging company Calico; a life sciences division, working on electronic contact lenses; the research lab Google X, where “moonshot” projects include self-driving cars and delivering wireless Internet via stratospheric balloons; and Nest, which sells connected home devices and is trying to reinvent the face-worn computer Google Glass.

Larry Page (as of today Alphabet’s CEO; Brin is president) described Alphabet as “mostly a collection of companies” in a blog post announcing the reorganization today.

Right now—and probably for a while—one of those “companies” will be pulling the weight of all the rest. But the message seems to be that ideas like self-driving cars and defeating aging could become as successful and influential as Google’s online services are today.

How long that will take is anybody’s guess. Calico looks to be the mooniest of moonshots. Nest generates revenue today, but its thermostat and smoke detector likely don’t sell in huge volumes. And although Google X’s Loon balloon project for Internet access is at the point of testing with wireless carriers, it still has far to go before real deployment.

We can probably expect Alphabet to spawn more subsidiaries before any of those we know today make a major mark on the world. Many projects inside the Google X lab, such as the self-driving car , are about as distinct and mature as other Alphabet subsidiaries named today, for example. And in his post today Page said that he expected his new company to make it easier to get “more ambitious things done,” and to spend more on long-term projects.

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