The case discusses the restructuring of global technology giant Google Inc. as it takes on a holding company structure that separates its highly profitable search and advertising business from its non-core “other bets”. The new slimmed down Google will focus primarily on its core search business with many of its former subsidiaries being spun off under the aegis of a parent holding company named Alphabet Inc. (Alphabet). The case discusses the rationale behind the move and how it had become inevitable for Google to opt for a change in its structure as it pursued potentially new businesses in industries far from its search-engine roots. The case highlights the benefits of the reorganization to the company, its employees, customers, and shareholders. The reform is likely to breathe new life into the company by making its investments and spending on research transparent and allowing for cleaner operations and more accountability while keeping investors happy. Though Google’s decision to restructure itself with a holding company has been lauded by investors, it is a risky bet that may create some problems for the company down the road. .. .
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The case is structured to achieve the following teaching objectives:
Understand key issues and concepts in reorganizing and the strategy behind Google’s restructuring.
Understand the strategy/structure relationship.
Understand the pros and cons of a holding company structure.
Discuss and debate whether Google’s reorganization efforts will bear fruit for the company.