Alphabet Soup: Why Google Restructured Its Brands
On August 10, Google startled us all by restructuring its business and shuffling its brands, creating some new ones along the way. Google is hugely successful as-is, and they’re so smart. So the move leaves many asking why the company would move away from the well-known and highly regarded Google brand and introduce Alphabet as its new corporate name?
Many organizations change their brand architecture when they change strategic direction, add important new capabilities, or make acquisitions and divestitures. Losing relevance or becoming diluted or stretched beyond the limits of the brand's credibility, or needing to operate more independently to capitalize on market opportunities are also triggers. In each case, rethinking the organization’s face to the outside world can be a powerful way to express its priorities and its future intent.
In Google’s case, by loosening its connection to some of the brands in its portfolio, Google is encouraging and facilitating innovation. In addition to allowing brands to do different things, it’s allowing brands to do things differently. The creation of Alphabet allows non-Google brands to directly express their intent without Google’s constraints. This which can unleash new relevance and energy inside and outside the organization. And keeping the corporate brand separate helps to insulate it from the business and brand risks being undertaken by various parts of the organization.
Alphabet's new brand architecture is not the same as its new organization structure. This is smart. There is no reason why the face to the world needs to mirror internal structures, and many companies would do well to follow Google’s example.
While it is moving away from a Google-centric architecture, many of the newly “freed” brands will still retain their Google-ness. Each has its own President and more autonomy, but these four still share the Google brand. And while YouTube and Android fall within the newly defined Google business, they are separate and distinct from the Google brand.
The brand realignment reflects Google’s ambitions far beyond search, and opens up possibilities for new sources of value creation. The illustration below is just one interpretation of what Alphabet may have in store for us.
Google has been imagining (or re-imagining) the world since its founding. This version of the brand architecture suggests we might expect to hear more about how to Share & Enjoy and Live Better from Alphabet.
Changing the brand architecture is a way to unlock the value of existing brands in the portfolio and create room for new ones. The creation of Alphabet looks like it will do just that!