September 7, 2015
Google, after more than a decade as the top search engine, has decided to change its corporate moniker to Alphabet. After 17 years of building a $400 billion business that controls everything from the world’s most popular search engine (Google) to the world’s most popular video portal (YouTube), to life extension research firm (Calico), to self-driving car developer and a host of other acquisitions, Larry Page and Sergey Brin have decided to rename their enterprise. Add to that the fact that CEO Page has turned the reins of Google over to Sundar Pinchai, and many people both in the Internet and on the stock market are wondering what’s going to happen next. Even before the soup has cooled, rumors are swirling that Google is interested in acquiring yet more companies, including everything from Twitter to a company that makes pocket toy satellites. So if you are wondering if Google intends to make Alphabet Soup of their company, let’s give the pot a stir.
The Best Soup Starts with the Best Ingredients
Brin and Page deserve a lot of credit. Ever since they went public in 2004, they have spent their money wisely, although in several cases it didn’t initially look that way. Remember when they acquired YouTube for a whopping $1.67 billion in 2006? At the time, a number of pundits thought the deal was questionable at best, being that the fledgling video portal’s only assets were hundreds of thousands of homemade videos and 67 employees. YouTube had yet to turn a profit and it was questionable whether it ever would. This was especially poignant since a number of media moguls were threatening the company with copyright-infringement lawsuits. But Brin and Page soldiered on, betting that the public was sure to migrate from TV to online video. Today, YouTube streams more than 4 billion videos per day, dwarfing the combined output of all the TV stations on the planet. That’s the good news. The bad news is that in 2014, even with $4 billion in revenues generated (according to the Wall Street Journal), YouTube still stubbornly refused to post a profit. Still, I doubt it gave the gurus at Google any sleepless nights, since YouTube only represented 6% of the company’s sales last year. Besides, Google seems to revel in betting on longshots.
A is for Artificial Intelligence
AI is the new trend. Everything from autonomous aerial vehicles to self-driving automobiles relies on artificial intelligence. There are even experiments in search engine technology powered by AI. With that in mind, Google acquired AI startup DeepMind for $500 million. What they plan on doing with the technology is anyone’s guess. The company’s website Says that “DeepMind is a cutting edge artificial intelligence company” to build general-purpose learning algorithms for simulations, e-commerce, and games. While a number of scientific luminaries, including Stephen Hawking has warned that the creation of artificial intelligence could spell the extinction of the human race, Google’s past experiments with turning AI loose online had decidedly non-life threatening implications. Earlier this year when Google trained an artificially intelligent network to view photos, the most terrifying thing it did was transmogrify images based upon the tasks it was asked to perform. For instance, when researchers asked the system what it thought dumbbells looked like, the system created an image that looked like a human arm attached to one. There were also bizarre transpositions of animal heads on humans and embedded in clouds. Read more about it here in this article from the daily main.
B is for Boston Dynamics
Here’s a question for you: What looks like an extra from Star Wars, sounds like a chainsaw, and walks like a Great Dane? The answer is BigDog, the quadrupedal robot being built by Boston Robotics for DARPA.
With the ability to carry more than 300 pounds of gear over rubble, up mountains and through snow and mud, this robot is intended to tote gear for soldiers in the field. Of course, until the company comes up with a quieter source of locomotion other than what sounds like a two-stroke engine, this is one doggie that won’t be sneaking up on anybody. Still, when you consider the technology in BigDog, including stereo vision, LIDAR, gyroscopic stabilization and the ability to climb 35 degree slopes fully laden, maybe if the technology doesn’t work out for the DoD, it can be retrofitted for the U.S. Post Office. BigDog is only one of nine robots on the Boston Dynamics website. Others include a bipedal humanoid robot named Atlas that competed in the DARPA Robotic Challenge. Designed for rescue, as well as to enter danger zones where humans fear to tread, Atlas can walk, climb stairs, turn valves, move debris, and even drive a rescue vehicle. While his utility can’t be beat, what he gains in mobility he more than gives back in the looks department. Let me put it this way, if you saw him coming to your rescue, you’d probably die of fright. Speaking of death, this brings us to the next letter in the Google Alphabet.
Can Calico Cure Death?
Trying to live forever is something billionaires have long strived for. Everyone from the first sovereign emperor of China to Conquistador Ponce De Leon have sought immortality. The difference is that with today’s state-of-the-art biomedical research, it just might be possible. Consider if you will that only a few years ago, transplantation was considered the creation of Dr. Frankenstein. Now it is commonplace. With advances in everything from prosthetics to genetic technology, making life extension a reality isn’t such a stretch. Still, some people think Larry Page and Sergey Brin have gone off the deep end on this one. But with a war chest of $45 billion at the ready, if anyone can take a crack at the Grim Reaper, it’s Google. Only time and a few billion dollars will tell. (If that doesn’t work, maybe they can figure out a way to transport their mind to a robot like Atlas.)
Google Gizmos Galore
The new company, Alphabet ,will also manage and develop a number of technology gizmos. Everything from diabetes detecting contact lenses, to a 360 degree virtual reality camera, a solar powered drone startup (Titan Aerospace), a delivery drone called Project Wing, to energy harvesting turbine powered kite called Makani are under development. There is also a high altitude balloon named Project Loon that purports to be able to provide internet access to people living in remote areas, and Nest, a company devoted to creating smart home products. Last but not least is Skybox Imaging, another $500 million acquisition that builds microsatellites.
It has enough created and acquired companies under management to literally cover every letter in the alphabet, so is it any wonder that Google decided to take the name Alphabet for its corporate umbrella? Ever since returning to the CEO spot at Google in 2011, Larry Page has wrestled with the best way to control his sprawling business empire. The problem for this dyed-in-the-wool entrepreneur is that his priorities were becoming divided. A quote from Mashable sums it up best:
“Larry was always more excited about big vision projects than the day-to-day grind of running the company,” says Bruno Bowden, who helped build Google Earth. “This structure makes those projects and his role far more visible. Wall Street will only care about Google proper and how Sundar is doing. For Larry, this gives him the chance to focus on a broader mandate as he always wanted.”
Y is for Why Now?
Restructuring the growing Google empire may be something that many see as inevitable, but the question of timing is something that has many scratching their head. As for whether the name change will hurt or help is something that only time will tell. From an institutional perspective the announcement of the new name actually caused company stock to jump by four percent the very next week. As Alphabet (nee Google) continues to grow through acquisition, the question is whether changing the name of the parent company will prove a boon to the brand or whether Google will ultimately wind up making alphabet soup out of its conglomerate.
Carl Weiss has been working the web to win since 1995 and has helped hundreds of companies increase their online results. He is president of W Squared Media and co-host of the weekly radio show Working the Web to Win which airs Tuesdays at 4pm Eastern on BlogTalkRadio.com. Click here to get his latest book "Working The Web to Win: When it comes to online marketing, you can't win, if you don't know how to play the game!".