Google to Alphabet
Google’s recent rebranding into Alphabet for its large holding company is an important lessons in branding, particularly for those businesses dreaming of creating mega-brands straddling multiple product verticals. Generally, startups are advised to choose creative business names that will not limit their growth and creative capacity. No matter what, the company must choose a brand name that it cannot outgrow: one that will seamlessly mutate into new business. But sometimes, there is a risk with that when the business is growing too fast and experimenting too many ideas and verticals, some of which are likely to fail.
The Case of Google
When Google was launched in 1998, its original mission was simply to organize world’s information in order to make this information accessible universally. In short, it envisioned itself as an online search company. But over the years, Google has grown into an eight-headed hydra. It is not primarily a search company but a technology company involved in everything from Video Streaming (Youtube) to productivity tools (Gmail, Google Apps, Google Docs), social networking (Google+), Life Sciences, Shopping, drones, cars etc.
Google’s Hybrid Branding Strategy
Unlike brands such as Virgin which have developed a unified and expansive corporate branding strategy where every vertical is christened “Virgin”, Google has been a bit cautious with its branding. It has deployed a dual strategy of branded house and house of brands.
The branded house strategy can be seen in Google’s product rollouts in such as Google Play, Google Maps, Google Drive etc. In the house of brands strategy, it has also built a vast portfolio of companies where the name “Google” does not feature anywhere.
A corporate brand is like equity and it is possible for the equity to be diluted if the company makes some missteps. If a mega company rolls out a product and then experiences a major product launch fail, the company will begin raising doubts in the minds of its customers and this will dilute the value of the brand over time. This can be quite detrimental for a mega-brand such as Google that has spent years and billions building its brand. As Google enters new market frontiers, it is going to have lots of hits and misses and where those misses carry the name “Google”, the company is going to experience a brand dilution.
By creating a parent holding company called Alphabet, the company can afford to try out and miss some new ideas without necessarily destroying the promise of the most valuable brand in the world. Many brand specialists expect Alphabet to be a silent brand name like Diageo and not a consumer-brand like Google or Virgin, for example. The name Alphabet will be heard more amongst investors as well as staff than amongst Google’s billions of consumers. It is not a very creative business name but given its role as the name of a behind the scenes holding company, it doesn’t really to be that creative.
There is another reason for Google choosing a holding company without the name Google. The Alphabet companies will be able to chart their own path without the burden of the Google brand which can be quite intimidating. It gives these companies a measure of independence. For example, the companies can create their own business strategies, have their own CEOs etc. The company does not have to worry about integrating all these companies into its mission or the larger picture. They are able to grow and succeed as independent business entities.
Devolving the operations of these companies can also give them room for creativity and innovation. They will be able to experiment with various ideas without necessarily having an impact on Google’s core business which is still very much internet-focused.
The Advantages of Alphabet
The creation of Alphabet allows the company to preserve the value of its strong Google brand while staying true to its mission statement of organizing information and making accessible universally. Over the years, Google was drifting into many areas and its brand was beginning to generate confusion and the original mission of the company was getting blurred as it expands into new areas such as Life Sciences. The company now realizes that there is a limit to what its brand can represent. Having a parent holding company allows Google to have a sharp focus on its core internet business which will yield lots of rewards for the company’s stakeholders.
Google’s creation of Alphabet should be seen as an attempt to bring clarity in the minds of investors and consumers alike as to the focus of its brand promise.