While the move is primarily intended to make the company’s operations more transparent, it has implications for each of the core businesses, says Francesco Radicati, senior analyst at Ovum.
The core Internet, search, and Android businesses will continue to operate under the Google name, managed by Sundar Pichai. Pichai had previously managed a range of products including the Chrome browser and Android operating system.
Unsuccessful ventures won’t be associated with the Google name, while successful ones will be more easily tied into the overall brand once they’re established.
Google’s Capital and Venture businesses will be organised with their own CEOs, as will Google X, the “moonshot lab” responsible for new projects like the driverless car.
Removing the moonshots and connected home activities from Google’s portfolio should enable it to focus on increasing its penetration in key markets such as India and China, says Radicati.
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The latter is a major market for so-called “forked” versions of Android, which don’t connect to the wider universe of Google services, effectively putting the company in competition with itself.
What about Thread and Nest?
He says what is less clear is the implication for Google’s IoT-related businesses.
He notes projects such as Thread and Nest were not mentioned in CEO Larry Page’s letter announcing the restructuring.
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However, these businesses, like Google X, will benefit from the tighter focus on their respective areas of interest by being separated from the search and YouTube businesses, he states.
He says another benefit is that less successful products will not necessarily tarnish the main brand.
Examples include the Google+ social network, which was recently decoupled from YouTube and other Google products, and Google Glass, which has been placed under the responsibility of Tony Fadell at Nest.
“Unsuccessful ventures won’t be associated with the Google name, while successful ones will be more easily tied into the overall brand once they’re established.”
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