Last year brought with it a number of interesting announcements and reports. One of those which seemed to come out of nowhere, came from Google and confirmed that the company were creating a new company which was being dubbed ‘Alphabet’. This was meant to essentially act as a holdings or parent company with Google falling under the umbrella of Alphabet. Although At the time it may have seemed a little confusing, the main focus seemed to be to remove additional Google divisions away from the main Google brand. Instead, these additional divisions were essentially becoming more independent of Google and existing as standalone stances, albeit, ones which also fall under the watchful eye of Alphabet.
Moving to the present and next week will see Alphabet announcing its financial results for the fourth quarter and in preparation of that announcement, a new blog posting has now gone live on Google Investors which looks to help further explain how the earnings will be reported for Alphabet. Cutting to the chase, they will be announced in two distinct categories, “Google” and “Other Bets”.
In terms of the actual difference. Alphabet has explained that their prominent segment, “Google” will be representative of all of the main internet-focused products. This includes their most obvious revenue streams like Search, Ads and Commerce. This segment will also still include much of the more widely associated Google services like Chrome, Maps, YouTube and Google Play. Not to mention, “Google” will also be inclusive of the various hardware offerings including the likes of the Nexus range of devices, Chromecast and also Chromebooks. Interestingly, the announcement also notes that their “newer efforts like virtual reality” will also be included under “Google”. Moving on to the more vaguely entitled “Other Bets” and this is being defined as a number of the other divisions. These include the likes of Google Fiber, Life Sciences, Nest, Google Ventures and Google X – or more accurately, just “X” as Alphabet did recently announce that they were re-branded their X division, resulting in the dropping of the “Google” tag. Further evidence of the continued branding separation.
Overall, and for more practical purposes, the end result will still be much the same. Yes, there is the new introduction of ‘Other Bets’, however, it has become clear that these novel divisions are taking on more of a life of their own outside of Google and this separation will actually allow for a clearer view of how the core Google is performing, while also providing clearer insight into how the likes of X, Fiber and Nest are performing. So again, while it may seem confusing at first, it is designed to offer a more clearer view going forward.