Unless you’ve been hiding under a rock this week, I’m sure you’ve heard that Google has radically changed its company structure by creating a new holding company called Alphabet, of which Google will become a wholly owned subsidiary.
Most of the consumer facing aspects of Google – search and digital ads, YouTube, Android and the like – will remain unchanged although under new management, while the more experimental areas of the business, such as Google Glass and driverless cars, have been hived off under the umbrella company. So what does this mean for the content manager?
At this precise moment, it seems, not that much. But it could prove to be significant for a number of reasons that are worth keeping your eye on, not least because Google will have an even more focused remit as a highly competitive, market leading search engine.
Mobile search is its major growth driver in the current quarter
Google’s move to split the very profitable search and digital advertising side of the business from its other pursuits is a disruptive take on how to do brand strategy. The other week I wrote a piece on how emotion is the basis of an effective brand which discussed the fact customer experience is key to a successful brand.
What’s interesting is that, as public consumers, our relationship with Google is so ingrained that, much like Pete Tong, it’s become part of our lexicon. That we adopted the verb ‘to google’ so ubiquitously is quite a statement of commitment.
That relationship wasn’t necessarily the same for Google’s investors, with the relatively steady search and ads business impinged upon by wackier, sometimes outlandish, ideas like research into immortality.
The more experimental areas have been hived off under the umbrella company
Alphabet helps to solve that by providing a blank canvas of a brand (literally a word that, as many commentators have already remarked, means everything and absolutely nothing) upon which to build new relationships without the pressure of playing to the Google name.
The split allows investors to be confident in Alphabet and Google as separate entities. In other words, investors in Google’s steady advertising arm don’t need to feel spooked when Google decides to invest in internet-connected self-piloting jet skis with lasers and, conversely, those investors that see potential in jet skis with lasers don’t need to be involved in the ad business. It gives everyone room and confidence on both sides. As such, Google stock took a significant leap on Tuesday, closing 4% up on the previous day.
Google will have an even more focused remit as a highly competitive, market leading search engine
From a content perspective, there could be changes on the horizon:
- SEO becomes more stringent
- Search and SEO may become even more focused on the level of quality required in website content. It’s a dog-eat-dog world, and as more and more companies realise the level of quality content required to maintain their rankings, the competitive nature of what’s on offer will only accelerate. Another Panda or Penguin (or equivalent) seems likely. Mind you, that’ll probably happen anyway.
- Mobile ads take centre-stage
- Alternatively, this change could mean that SEO is sidelined in favour of the ads business. This is still Google’s most profitable channel, but it’s suffering under the weight of the great mobile switchover. More consumers are using their phones to browse the internet (hence the ‘Mobilegeddon’ algorithm change recently), but Google can’t currently charge as much for mobile ads as it does for desktop ads, so it’s going to be looking for ways to better monetize this side of the business, including garnering technologies that better target ads. Google’s CFO Patrick Pichette recently said that mobile search would be its major growth driver in the current quarter. I expect the mobile algorithm to ramp up a bit more.
- New acquisitions offer new competitive edges
- Alphabet’s acquisition strategy may bring new subsidiaries onto the scene, especially in the mobile space in a similar vein to Facebook’s acquisitions of WhatsApp and LiveWire, which spells new creative opportunities you’d never even considered. Keep an eye out for some unusual stuff as new, ultra-driven and enthusiastic CEOs pop up all over the place. As Reuters journalist Felix Salmon writes on the Seeking Alpha blog: “Larry [Page] is now able to promise that job to lots of people, which is fantastic for talent retention.”
- New innovations could lead to new products
- Further to that, now that Alphabet has a green card to try new, sweeping and bold pursuits, it could slowly shift things away from the classic search products we know and love. Perhaps a new social network will emerge – one that’s definitely not Google Plus or, indeed, Google Anything.
On those last two points, the fact that tweets have started appearing in Google’s search index suggests that Google and Twitter have buried the hatchet, and the doors are wide open for Alphabet to acquire Twitter.
With the scope for search as it stands, Google itself looks to be becoming far more competitive for the content creator. However, with the potential for wild acquisition and innovation offered by Alphabet, a new revolution could be on the cards. It was that sort of lofty thinking by Page and Sergey Brin that gave us Google in the first place, and they have the scope now to do it again. Watch this space.