At Google, Breathing Room for New Ideas

To see how Google Inc. Chief Executive Larry Page hopes to turbocharge a growing fleet of speculative projects under a new holding company, look at Nest Labs.

After Google acquired the maker of connected-home devices for $3.2 billion in 2014, Nest kept its own recruiters and its own system for vetting job candidates, skirting Google’s famously deliberate hiring process.

 Nest still rents computer servers from Amazon.com Inc., rather than use Google’s data centers. Nest co-founder and CEO Tony Fadell also curbed some Google perks, such as free food, to maintain Nest’s scrappy vibe.

Mr. Fadell and co-founder Matt Rogers negotiated unusual autonomy for Nest. Now, as Google reorganizes and creates a new parent company, Alphabet Inc., it is using Nest as a model for running its other startup operations—the “bets” in Alphabet—according to people familiar with the plan.

The restructuring separates Google’s core businesses—including Internet search, the Android operating system and YouTube—from newer unrelated businesses such as Nest, Google Life Sciences and Fiber, the fast Internet service.

 Mr. Page will remain CEO of the Alphabet holding company, but step back from running Google’s core to oversee the other units, which will operate more independently.

A date for the new structure hasn’t been made public, but Google said it would start providing quarterly results for the core and startup operations with the fourth quarter.

“If Google can deliver more broadly what it gave Nest, that predicts success for the rest of the Alphabet projects,” said Max Levchin, a co-founder of PayPal Holdings Inc. who spent more than a year at Google after it bought his social startup Slide in 2010.

Under the new arrangement, the “bet” companies will do their own hiring, write their own contracts and plan their own marketing campaigns, with an eye toward moving more quickly, the people familiar with the matter said.

Executives at Google’s core businesses will focus on things like search and advertising and won’t be distracted by having to assess and approve the plans of Alphabet projects.

Executives got an unexpected glimpse of the new order on Aug. 11, one day after Mr. Page announced the reorganization.

As they convened to discuss one of the young bet businesses, Sundar Pichai, who will be CEO of core Google, wasn’t there. The others waited for a time, but then realized Mr. Pichai didn’t need to be there. The meeting went ahead without him, giving the incoming Google CEO time for other priorities.

Source : techgignews.com