On Monday, Google announced its biggest move as a company after 11 years: All its services are transferred to a new operator called Alphabet (www.abc.yz).
The upgrade of the company to separate entities under Alphabet allows "a larger scale of management, as we can run things independently that are not very relevant," the statement said.
Page and Sergey Brin will be at Alphabet as CEO and Chairman respectively, and they named rising Google star Sundar Pichai as CEO of the machine search. Of course, each company will have a CEO, and Page and Brin will oversee, support, and innovate across all portfolio companies.
But beyond better management and focus, there is another explanation for this move: Branding
The 12th marketing rule outlined by Al Reis and Jack Trout in the classic marketing guide, and in the 22 unchanging marketing laws, is "The law of the extension line."
Reis and Trout advise companies to resist the pressure to expand their share capital.
Do not spread too thin and not try to be everything for everyone.
This also applies to product lines: Extending the product line to unproven areas is dangerous. While most companies believe that the strength of a Brand will help sell new products, often the new product is bad in the old. Brand is also tarnished in this way.
Google is not an ordinary company.
What is Google Brand? Google's mission is to "organize global information to make it accessible and useful."
And the second rule of the company is "It's better to do one thing really, really well."
Google explains: "We search. With one of the largest research teams in the world that focuses exclusively on search engine optimization, we know what we do well and how we can do it better. ”
But how does it explain non-search services like Gmail and Google Maps? Google connects these products with the search:
“Our dedication to improving search helps us apply what we've learned to new products like Gmail and Google Maps. Our hope is to bring the power of search to unexplored areas, and help people have more access and make even more use of the ever-expanding information in their lives.”
OK, it looks like Google has managed to link these related products. Search affects how one finds one address on the map, and the new Google Photos certainly has its place under that Branding.
But how does one explain Calico, a Google company “for health, well-being and longevity”? Or a glucose-sensing contact lens? It just can't. Google has expanded far beyond the promise of the original Brand name.
So Google had basically two options:
1. To develop its brand name from "organizing the information of the world" to something much wider to include all the projects of Brin and Page.
2. Keeping Google focused on its true brand name and leaving what it does not fit.
After all, how can unmanned cars connect to Gmail? Somewhere here comes Alphabet.
That is why Page and Brin had to create a new holding company, Alphabet, with a new brand.
They had to make sure that this brand is broad enough and reflects their vision to make the world better through bold innovation projects.
With information from VB
