August 12, 2015

Google’s New Alphabet

Today’s post comes from guest blogger John Lineberger, Brand Strategy Associate at Addison Whitney

Seventeen years ago the world was introduced to an internet search engine with a funny name.

Between then and now that search engine would become one of the largest companies in the world, spawning a number of household software names, a movie, and that funny name would change from a noun to a verb. Nowadays, what started as the most intuitive internet search engine to date has begun to execute on ideas previously seen only in The Jetsons and Star Trek—from self-driving cars and internet drones, to cancer-detecting bracelets and lifespan advancement technology.

This week, Google (which is, of course, the aforementioned company) announced that it will make another step forward. Google will still be Google, albeit a slimmed down version; but its former subsidiaries will become its brothers and sisters, and there for the first time, Google will be under the umbrella of another brand. The overarching parent role previously held by the Google brand is being transitioned to a newly created brand called Alphabet, a reference to all of the companies within it being “the letters” in the greater structure.

Former functions of the Google name such as Fiber, Google Ventures, and Calico will now be mentioned alongside the former master brand, rather than under it. Management teams and new CEOs will have direct control over these companies that used to be under the direct influence of Google. This change is coming for one big reason: the founders of Google, now CEO and President of Alphabet, understand the value of brand architecture.Google, Alphabet Org Chart

Restructuring the portfolio may seem risky. We all know these subsidiaries of Google as exactly that—subsidiaries of Google. With such prominent brand awareness, what if cutting ties hurts the credibility of these products? What if some faith is lost in the efficacy of these companies as new executive teams are put in place and each has more autonomy? This is a move never seen before within the major market powers.

However, the benefits far outweigh the risks. Some still solely associate Google with its first innovation, the search engine. Over the years it has grown and evolved into so much more. The brand equity of every company in the Alphabet umbrella is strong. By making them independent under a holding company, their individual brands can only breathe and grow. The diversity of the companies sprouting under the Google name was such that it didn’t make sense to keep an automated drone company or a digital contact lens company tied up in the Google name. By allowing these companies room for separation, they are now able to grow into unique, effective brands independent of Google and its connotations.

In a more concrete sense, the move allows investors to see all of the different companies in a more disparate lens. Google will still be the largest and most profitable company in the Alphabet portfolio, but investors can now look and understand where revenue is coming from and recognize the fact that some of the newer companies will not be profitable for a few years. The move also allows for easier new company acquisition and spin-off.

Staying conscious of the architecture of one’s company can be crucial to its success. As with all aspects of branding, it can be an overlooked process in the course of a company’s development; and can be even more overlooked than such devices as naming, positioning and messaging due to its tendency to be a little less sexy. Initially, much of the coverage was centered on the name, and less so around the strategic decision. However, we see here how brand architecture can be a beneficial and proactive step.

And for those a little bit uncomfortable with seeing such a change from an old standby to this new Alphabet, just remember: G is for Google.

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Addison Whitney is a global branding firm with a passion for building strong brands. 

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