With Alphabet, Google wants to avoid becoming Microsoft

Although strange and surprising at first glance, having thought about Alphabet for a couple of days I can see some sense in the move.

The Google brand is so synonymous with search that its efforts in fields ranging from online video and operating systems to home automation and self-driving cars have constantly raised questions as to why a search company is delving into such far-out projects. With Alphabet, Google no longer has to justify its moonshots and offshoots and can experiment as much as it wants. If projects grow into their own brands, great — they'll exist under the Alphabet umbrella. If they fail, the die off without hurting the Google brand. 

As Devindra Hardawar writes at Engadget, creating Alphabet avoids stagnation and allows new projects to grow without the burden of the Google brand:

In the long term, forming Alphabet basically seems like a way for Google to avoid following in the footsteps of Microsoft and IBM, companies that faced stagnation at points in the face of younger, nimbler competitors (like Google). When you've got successful legacy businesses, like Google's search and Android OS, sometimes it's better to keep them separate so they don't get in the way of new ideas. Each of Alphabet's subsidiaries will have their own CEOs and will be managed somewhat independently, which should technically make it easier for them to innovate without worrying about what every move means for the entire conglomerate. At the same time, they'll also be able to share their successes with other Alphabet companies.

I think that's an astute assessment. 

Source: Engadget