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Is it really as easy as ABC for Google's parent company Alphabet?

From AI to driverless cars, will Alphabet's investments pay off?

by Andrew Saunders
Last Updated: 07 Apr 2016

Formative years

Appropriately enough Alphabet was born by blog, announced by then Google CEO Larry Page on the firm’s official web log on 10 August 2015.  It’s a holding company for Google’s more out-there activities, the so-called ‘moonshots’ such as driverless cars, AI, ageing and disease and, er, investment. The revenue generating businesses – search, Chrome, Android, plundering our personal data – remain under the Google banner.

Google itself, of course, dates back rather further, to 1998 when two Stamford graduate students – Page and co-founder Sergey Brin – scraped together $1m from friends (we should all have such friends) to back their hunch that using page-ranking algorithms was the way to make sense of the internet.

Boy, were they right – in the 18 years since, Google has made hundreds of billions of dollars and over 180 acquisitions, including YouTube for $1.65bn, Nest Labs for $3.2bn and Motorola for a whopping $12.5bn. All despite the fact that neither Page nor Brin ever got round to completing their PhD studies.

Recent history

The rationale is simple – Google gets on with making the squillions, Alphabet comes up with wacky ways of spending them, in search of the Next Big Thing. With so many irons in the fire, some are bound to succeed.

It's working, up to a point. In February Alphabet briefly overtook Apple as the world’s most valuable company, with a market cap of $517bn. There’s even a Brit angle – DeepMind, the AI division whose AlphaGo computer beat World Champion Go player Lee Sedol last month, is a London-based outfit acquired in 2014. But its pockets, although deep, aren't bottomless. It's just hung a For Sale sign over its Boston Robotics business as part of drive to generate revenues more quickly.

Who’s the boss?

Larry Page. Given his on/off history as Google’s boss, a cynic might suggest that Alphabet was dreamed up mainly to give Page something to be CEO of that wasn’t Google. Sundar Pichai now has that honour.

Don’t mention

Tax. Or the fact that for most punters Google and Alphabet are still one and the same thing. By that measure, it’s been one of the lowest-key corporate rebrands ever.

Vital statistics

Sales: $75bn

Net profit: $16.3bn

Employees: 62,000


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