Fri. Dec 6th, 2019

Alphabet recognizes that only Google really works in the group | Opinion



Sundar Pichai, who runs Google, will now also lead Alphabet, of 890,000 million dollars, replacing Larry page. President Sergey Brin, co-founder with Page, will also step back, according to Tuesday's announcement (both Page and Brin will remain on the council). Sundar Pichai, CEO of Google, will now also lead Alphabet, of 890,000 million dollars, replacing Larry Page. President Sergey Brin, co-founder with Page, will also step back, according to Tuesday's announcement (both Page and Brin will remain on the council). But the real causes are not clear.

Establishing Alphabet as a business holding company in 2015 was already enigmatic. The idea was that several units, from Google to the Waymo autonomous vehicle division or Verily health software, will operate independently.

Page became CEO of the parent company while Brin assumed the position of president, and Pichai was put in charge of Google.

Part of the logic was to allow Alphabet's "other bets" to prosper. But in reality they were the co-founders' favorite projects, and their income was and still is a small fraction of what Google's advertising machine, which includes YouTube, means. In the third quarter, non-Google group sales amounted to only 0.3% of Alphabet's total $ 40.5 billion.

Perhaps this partial reversal is a recognition that the other bets have not yet taken off; and the fact that Brin and Page were already in the background, although they retain a lot of influence through their preferred shares (with more voting rights).

His willingness to cede command to Pichai, as well as giving Eric Schmidt the role of adult supervisor at an earlier stage in the life of the company (between 2001 and 2011), is also right.

Alphabet says the measure simplifies the management structure. It certainly reflects the reality: Pichai is already the most prominent public image of the company, a role that will be increasingly important in the midst of regulatory scrutiny in Washington and Brussels.

A year ago, Pichai testified before the United States Congress. The change probably prevents the two co-founders from having to appear in the future. It also releases them to concentrate more on other projects both inside and outside Alphabet. For example, Page sponsors the space mining company Planetary Resources.

As for Pichai, he gets promoted and will now explicitly run the third most valuable listed company in the world. There is much to say about a succession process that has caused little more than a shrug of the investors.

Establishing Alphabet as a business holding company in 2015 was already enigmatic. The idea was that several units, from Google to the Waymo autonomous vehicle division or Verily health software, will operate independently. Page became CEO of the parent company while Brin assumed the position of president, and Pichai was put in charge of Google.

Part of the logic was to allow the so-called "other bets" of Alphabet They will prosper. But in reality they were the co-founders' favorite projects, and their income was and still is a small fraction of what Google's advertising machine, which includes YouTube, means. In the third quarter, non-Google group sales amounted to only 0.3% of Alphabet's total $ 40.5 billion.

Perhaps this partial reversal is a recognition that the other bets have not yet taken off; and the fact that Brin and Page were already in the background, although they retain a lot of influence through their preferred shares (with more voting rights).

His willingness to cede command to Pichai, as well as to give Eric Schmidt The role of adult supervisor at an earlier stage in the life of the company (between 2001 and 2011) is also successful.

Alphabet said the measure simplifies the management structure. It certainly reflects the reality: Pichai is already the most prominent public image of the company, a role that will be increasingly important in the midst of regulatory scrutiny in Washington and Brussels.

A year ago, Pichai testified before the United States Congress. The change probably prevents the two co-founders from having to appear in the future. It also releases them to concentrate more on other projects both inside and outside Alphabet. For example, Page sponsors the space mining company Planetary Resources.

As for Pichai, he gets promoted and will now explicitly run the third most valuable listed company in the world. There is much to say about a succession process that has caused little more than a shrug of the investors.

The authors are columnists of Reuters Breakingviews. The opinions are yours. The translation of Carlos Gomez Down, is the responsibility of Five days

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