In the back half of 2015, Google split itself up. There’s still the Google that makes the search engine, ads, and Android. But a bunch of “other stuff” got spun out into a new parent company, Alphabet. And it was very, very confusing.
So 2016 was always going to be about a couple of core questions: would Alphabet make sense, and would Google get more “Googley” under its new CEO, Sundar Pichai? The answers to those questions turned out to not be a simple yes or no. Instead, we have had to rethink what these companies are, and where they’re going.
Would Google get more “Googley” under its new CEO?
Let’s start with Alphabet, the parent company. It’s had what looks like a pretty rough time of it in the past year. Nest, the smart thermostat division, had a whole lot of drama and leadership change. Fiber hit the skids. Boston Dynamics has yet to find a buyer. Project Wing’s delivery drones keep crashing. The X division’s self-driving car unit got spun out into its own Alphabet company, Waymo, but it’s not going to make cars itself anymore. We could go on!
That all seems awful and much of it is, but it’s also just a company clamping down on things that aren’t working instead of letting them play out the thread forever. That’s the main takeaway from Bloomberg’s excellent profile of what’s been going on over there. Alphabet’s CFO, Ruth Porat, is forcing those “Other Bets” to get a little more serious.
Under Pichai, Google stopped being so timid about things that it used to worry about
Speaking of getting a little more serious, it seems like that’s starting to happen at Google itself, too. Under Pichai, Google stopped being so timid about things that it used to worry about, namely angering its partners. It started making its own hardware at scale for the first time, with a slate of stuff for the fall from a phone to a speaker to Wi-Fi routers. It also unceremoniously killed the pie-in-the-sky modular phone project.
Not everything that Google is doing is landing well, of course. Its smartwatch platform is delayed at best and a dumpster fire at worst. It didn’t manage to ship a flagship Chromebook for the holiday season. It still has no viable messaging or social strategy. And Google was entirely too slow at fending off fake news from flooding people’s search results.
On the brighter side, Google put a renewed emphasis on its skills in machine learning, with the Google Assistant, greener server farms, and better enterprise cloud services. It also applied a little fearlessness to search, unapologetically pushing the AMP version of webpages instead of the original sites. Oh, and it also beat the world’s best Go player — a feat many thought was going to be decades away.
Add it all up and there’s one word that describes both trends: discipline. Neither Google nor Alphabet are quite nose-to-the-grindstone, straight-laced operations (yet?), but they’re both more serious and clear-eyed about their businesses than they were last year.
Verge 2016 Report Card: Google
- Google Pixel phone
- Machine learning
- Cutting things that don't work
- Too many Alphabet companies flailing
- Social and messaging still flummoxes Google
- Nothing makes real money except ads