Every month a hundred billion searches run through Google – a repository of the world’s curiosity, hopes, dreams and fears. Google has been a verb in the Oxford English Dictionary since 2006, it is valued at $445bn and last year had revenues of $66bn. But as its billionaire founders have made clear, none of this is enough. Google has come a long way since it started as a search engine 16 years ago. Now a tech conglomerate with interests in everything from media to insane incredible driverless cars, medical devices, the calico longevity research project, smart home appliances, fibre-optic cable and drone delivery, being seen as “just” a search company – no matter how successful – is a handicap, according to its founders. “As Sergey and I wrote in the original founders’ letter 11 years ago, ‘Google is not a conventional company. We do not intend to become one’,” Page wrote in a blogpost. “As part of that, we also said that you could expect us to make ‘smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.’ From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have. “Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” wrote Page. The European Commission accused the company in April of engaging in anti-competitive practices by privileging its own products and services over those of competitors in its search engine. There have been calls for a breakup.
Wall Street saw Google’s share price up over 5% initially. Investors have long been irritated by a lack of clarity on how much Google is spending on its “moonshot” projects. The new corporate structure, they hope, will give them greater clarity. Scott Kessler, equity analyst at S&P Capital IQ, said the move would allow Alphabet to “run the Google operating unit in a way that gives people greater insight” while taking the pressure off Google’s early stage, money-losing ventures that – for now – Wall Street is less interested in. But, Kessler warned, investors would be watching closely to see that extra clarity was delivered. Google’s move comes at a time when rivals like Facebook and Amazon are moving away from their core businesses. Amazon became the world’s most valuable retailer last month, beating out Walmart, but not because of its retail business: the company’s shares soared after particularly good results from Amazon Web Service, AWS, the company’s collection of remote cloud computing services. Facebook now counts WhatsApp and Instagram among its portfolio of businesses – two ventures that are growing faster than its core business. Betting on your one core business, no matter how profitable, is risky. Just ask Microsoft, which has suffered as the internet has eaten into its Windows business. Technology is revolutionary, not evolutionary, Google co-founder Page warned staff a few years ago as he stepped back from day-to-day running of the search engine business he had helped found. In a memo to staff he said the move was meant to make sure he could get the “next generation of big bets off the ground” and warned if Google didn’t pick up the pace it risked becoming irrelevant.