The US giant reorganizes. He wants to separate immediately profitable activities activities whose profitability is later. Google itself will keep the search engine, mapping, apps, YouTube, Android, and especially the advertising, the latter representing the bulk of its turnover. Google will be integrated into a new company called “Alphabet” that will take care of other activities such as Calico (Health) Life Science (contact lenses that measure glucose), Nest (connected alarms), Fiber (very high-speed network ), robots and X-Lab from which emerge the craziest ideas like cars without drivers, drones or the Loon Project internet relay balloons.
Here are the seven questions arise after the announcement of the redesign of this large and complex structure that is Google.
1 / What qu’Alphabet?
“Qu’est- qu’Alphabet this? asks Larry Page, alphabet is basically a set of companies. The biggest is of course Google. ” Larry Page, co-founder of Google, will be the CEO of the new entity, while Sergey Brin, the other co-founder, will be the president. Eric Schmidt, will head the Board of Directors as Executive Chairman (Chairman). Sundar Pichai becomes CEO on his side of the “new Google”.
The amazing journey of Sundar Pichai
2 / Is it a crucial turning
The turn is crucial for Google. Officially, this reorganization is to give more independence to the various group companies. Clearly, more question for Google to continue to house all attempts, more or less successful, coming out of R & amp offices; D. “The Alphabet firms must have their independence and develop their own brands,” summarizes Larry Page.
3 / A new entity to avoid failures?
The company wants to both continue to innovate, to launch very bold programs but does not want his name to be associated with the inevitable failures, such as Google+ or Google Goggles. If projects fail, they die but must not initiate the search engine reputation and especially advertising that relates.
4 / Google was it too big?
In addition, Google had become too big. Suddenly, he had trouble keeping his talents. The new organization is expected to create the baronies, like in Game of Thrones, ensuring the loyalty of the most brilliant people. Instead of being lost in a large organization, they will be president or CEO of a smaller company, independent and reports directly to Alphabet. They also bear the responsibility of a project, the laurels on success and blame for failure.
5 / Why do investors applaud?
Markets reacted very favorably. In electronic trading after the close of Wall Street, Google was up 5% on the announcement of the reorganization. The general feeling was indeed related activities that weighed on the group’s performance. Alphabet should arise in the future separate accounts for Google and other companies in the group. The stock level, all shares will be converted to Google Alphabet title which will remain listed on the Nasdaq. The date of change has however not specified.
6 / Why Delaware?
According to the Anglo-Saxon press, Alphabet was registered in Delaware. Surprising, Delaware is a US state practice for years a tax dumping policy and authorizes entrepreneurship without looking too closely. We see it bloom companies that are only mailboxes without any office in the state and that the owner’s name is unknown. According BFMTV, the benefits from intangible property, including patents and trademark rights, are not taxed. In short, Delaware is a tax haven.
Google, created in California in 1998, opted for a registration in Delaware in 2003, just before its IPO. The motivation was not only tax: Delaware also issue shares with different voting rights. Sergey Brin and Larry Page, with only 13% of the capital, held 55% of Google’s voting rights. It’s a safe bet that they will use this opportunity to keep a majority of votes in Alphabet.
7 / BMW Why is it angry?
But the two founders will perhaps regret having chosen the name Alphabet for their new entity. It is indeed the name of a BMW subsidiary specializing in car rental companies. The German automaker said it had not intended to sell the domain name and that he had not been informed of the creation of Alphabet by Google. Under US law, two companies may well have the same name, provided it does not create confusion in the minds of consumers. In the case of BMW and Google, if the business of both companies are fundamentally different, the risk of confusion exists nonetheless: the American giant offers versions of Android for automotive and continues its R & amp efforts; D cars without drivers. So the question remains unresolved and Alphabet web address is now abc.xyz.
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