“Google is not a conventional company. We do not intend to become one.” The words written in Google’s original founders letter 11 years ago by Larry Page and Sergey Brin, and they still ring true. Indeed, with the announcement of the creation of the new company, Alphabet, it seems said founders are hell bent on defying convention. Yet, a tech conglomerate such as Alphabet, within which Google will only be one brand, is not really news, is it
In fact, this feels like the dawn of the tech conglomerate age, with industry giants including Facebook, Amazon, Apple, Microsoft, and Google itself continue their remarkable race for acquisitions. Google is not the only one. It isn’t the first, and it might not be the last, but it’s certainly the latest among a list of aspiring conglomerates striving to stay ahead in the platform war they have begun.
So, does Alphabet stand a chance of winning this war? Can Page and Brin continue to defy convention, and succeed where the traditional conglomerates of the 60’s and 70’s failed? Their failure was the ability to reconcile the various businesses they brought under their umbrella. The reason: the unavailability of a common platform. Alphabet, and its competitors, should not face the same problems, what with all the open source technologies available today.
The Pathway to Success
It comes down then, as it always does, to branding, and to which company can manage to do it better than all the rest. There are lessons to be learnt from the past too, particularly through analyses of why the hulking conglomerates of yesteryear failed to brand effectively. For one, they failed to maintain brand differentiation, which is not terribly surprising at all, given their organizational hierarchies and setup.
For two, they could never truly figure out whether to pursue a corporate strategy or a brand strategy, or indeed, a combination of the two. Go the Unilever route where the umbrella corporation’s name is commercially non-existent, the L’Oreal way where corporate is kinda, sorta commercial too, or do you do what Apple do? Corporate and commercial are one and the same! Would you really bet against Apple?
The challenge for Alphabet and its competitors today is the development of a single, cohesive, underlying platform – one where their users can move from one experience to the next without hassle or delay. Of course, revenues for these giants depend upon customer information. Therefore, an ever-growing user pool is the other top priority, and this is why Google wants to place ads on devices in and around your home. Think Nest and their products.
The advantage Alphabet has going into the arena is one Google has always possessed. It’s not a conventional company. 11 years since its foundation, and it has successfully failed to become one. So too, Alphabet is unique, not in its concept as a tech conglomerate, but because of its brand architecture. It’s different, it’s unique. It’s Google, very.
Alphabet is unlike anything else before it, and yes, it’s betting against Apple, and looking good for it too! It’s a hybrid, and it’s one with a difference. It’s a strong corporate name [potentially], backing a whole host of incredibly strong, diverse brand names, including Google, X, Android, YouTube, and Nest. These brands have their own identities, separate from Google, and will only serve to enhance the Alphabet brand.
However, Google acquired, and thus Alphabet will now own, brands such as Calico, Life Sciences, Sidewalk, and Fiber too. Brands which are not nearly as well-known as Android or YouTube, but are yet full of potential. So, how will Alphabet exploit this potential? Will it make of Calico what Microsoft did of Nokia? As many brands as already exist under the Alphabet umbrella, and with more to definitely be added, the chances for a few brands to carry the rest may not be the best.
So Alphabet have thrown the choice out the window, and embraced both a corporate strategy and a brand strategy. The individual brands may or may not prosper outside of Google’s vast shadow, but ‘not’ is a chance Alphabet seemingly doesn’t want to take. The true genius behind this latest initiative by Page and Brin lies in the fact that it only serves to strengthen Google itself, helping enhance its appraisal by Wall Street investors.
The Alphabet Advantage
Now, the idea usually behind a conglomerate branding is a restructured organization for brand extensions, each of which can then potentially become independent brands with their own, distinct competitive advantages. Alphabet, on the other hand, has a unique advantage: the Google search services. The search engine alone allows Alphabet with near unprecedented chances of success.
How? Because each brand under its shade, whether it grows or stagnates, succeeds or fails, will constantly, ultimately contribute to the Alphabet conglomerate brand. Google, Nest, YouTube – all of them simply help Alphabet’s shade grow larger, adding to the more than 180 brands already acquired by Google. An opportunity arises here too, one for Alphabet to be the pioneer of an entirely new branding type of structure.
If Alphabet has its way – and if Google’s illustrious history is any indication, it certainly will – no longer will the conglomerate be dependent on its sub-brands, but be a powerful brand unto itself. We stand on the brink of new horizons, gazing at the dawn of the tech conglomerate era, and while Larry Page insists branding Alphabet itself is not on the agenda, here lies a clear opportunity for the newly launched company to truly lead the industry into the coming age.