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Google restructuring could rein in business 'chaos'

Sharon Gaudin | Aug. 12, 2015
Creating Alphabet unlikely to bring changes to search or Android, analysts say.

"The change itself does not entail any changes to product," said Scott Strawn, an analyst with IDC. "It's about corporate structure... People don't need to worry this will change Google search or Android."

Down the road, the restructuring could eventually lead to the company's getting rid of lagging business ventures or research projects but Strawn doesn't expect anything to happen immediately.

"I don't think that's linked to this move," said Strawn. "The shuffle could place people in charge to make those decisions. As roles change, different people will make different decisions."

However, the massive restructuring also could bring its own problems.

Another layer of management at the Alphabet level could make it more difficult for some business units to get the attention they need.

Different CEOs working under the Alphabet umbrella will have their own methodologies and when some become more successful than others, internal battles could pop up, shifting focus and possibly funding.

"I expect Google will use this to make sense of chaos, but things go wrong," said Strawn. "You never know."

Judith Hurwitz, an analyst with Hurwitz & Associates LLC, said the move could make the company more structured and disciplined.

"Instead of having one big company where things can get lost, you'll have multiple divisions with their own specific budgets and people overseeing them," she said. "You can't hide things so much now. I'm sure there are a million little projects all over the place that people don't even know exist."

The restructuring should give Google a needed boost, according to Hurwitz.

"If you have a person responsible for a division and there's new accountability," she said. "It will change the whole equilibrium of the company. It could be pretty exciting if it works."

 

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