Recently, Google has re-organized the company’s corporate structure under a newl
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Recently, Google has re-organized the company’s corporate structure under a newly formed umbrella company called Alphabet. Alphabet will operate as the parent company for a number of smaller companies, including Google, which will continue to focus on its core businesses such as Android, YouTube, search and ads. The companies that are not part of Google Inc. will include more innovative businesses such as the Google X lab (driverless cars, Google Glass, drone delivery), Calico (increasing longevity), Verily Life Sciences (formerly Google Life Sciences) and the company's robotics division. Google Ventures and Google Capital will also become independent Alphabet companies.
Under Alphabet, these “moon-shot” businesses are subsidiaries. It seems that the company would hand over its moon-shots to Alphabet and wash its hands of these businesses. However, that no longer seems to be the case, as Google's CFO, Ruth Porat explained. Speaking at the Vanity Fair New Establishment Summit, Porat described Google’s interest in continuing to pursue radical investments. She pointed to the “70/20/10” rule: Google’s resources are to be divided into three segments, one of which will receive 70% of resources, another 20%, and the last 10%. As might be expected, the largest portion is sent to Google’s primary businesses. The smaller 20% percentage is distributed to relevant side businesses while the smallest share is given to “moon-shot” businesses. Not too many resources are given to these projects because they almost certainly lose money at first instead of generating it.
Google famously uses the 70:20:10 model to manage for its innovation. Back in 2005, Schmidt said, “We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses: Google News, Google Earth, and Google Local. And then, 10 percent of our time shouldbe on things that are truly new.”
Alphabet Calico Google X Fiber Working on big Fights age-related disease Providing super-fast Internet Google Ventures Google Capital Funding for bold new companies nvests in long-term tech trends Nest Google Smart home products AnoeS SearchYouTube Apps MapsExplanation / Answer
The subsidiaries of Alphabet which cannot be categorized under the 70% category (garnering most of the resources and working as core innovation):
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