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Alphabet Eyes New Frontiers
Group 10 presented on Alphabet Inc. Key points include: - Alphabet was created in 2015 through the restructuring of Google. - The restructuring allowed Google to own diverse subsidiaries under one corporate structure to create more value. - Alphabet uses a decentralized structure to improve productivity but it can lose control and create different agendas. - Alphabet's corporate governance, including dual class shares, is controversial as it gives insiders disproportionate voting power but protects entrepreneurial management.
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Details on group members and timeline of Alphabet's establishment and expansion.
Discussion on IPO, governance practices, innovation approach, and positive share performance post-restructuring. Overview of Alphabet's key investments like Android, YouTube, and focus on revenue generation from its core services.
Exploration of Alphabet's decentralized structure, its benefits, drawbacks, and conditions for effective implementation.
Analysis of governance issues, benefits and costs of dual class shares, and implications on shareholder rights.
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Alphabet Eyes New Frontiers
- 1. PRESENTED BY GROUP10: AKANKSHA VERMA 20DM014 AMAN AGARWAL 20DM023 AMIT KUMAR HOODA 20DM028 ANAND VIJAY SONI 20DM030 CHITRANSH 20DM067 LEELA KRISHNA CHINNAREDDI 20DM112 RADHA GUPTA 20DM164
- 2. • Alphabet wascreated through a restructuring process • Several subsidiaries faced problems after restructuring • Timeline INTRODUCTION 1995 2004 Expansion 1998 Incorporation 2000 Largest search engine 1997 Domain Registration 2015
- 3. INVESTOR RELATIONS • IPO •Approach to Corporate Governance • Class C shares INNOVATION AT GOOGLE • 20% time • Casual collision • Embracing failure
- 4. INVESTING OUTSIDE THECORE Android - 2005 DoubleClick - 2007 YouTube - 2006 Moonshots
- 5. RESTRUCTURING Announced on Aug-2015 Segmentreporting was introduced Existing share of google were converted
- 6. • On thenew policy, Investors reacted in a positive way. • Which also showed in increase of Google shares. • Performances of Alphabet is very promising and encouraging. • By Feb 2016, alphabet share raised by 50% compared to summer of 2015.
- 7. • 70-20-10 approach •Organization structure, which allows Alphabet to be Innovative and stay ahead of the time. • Increase in Revenue compared to last quarter 4 and also from previous quarter. • Found in 2011 by ex-Apple employees. • Google acquired it in 2014 for $3.2 billion.
- 8. • Niantic Labsas an Independent entity in August, 2015. • Bloomberg also part ways in 2015. • 90% of revenue generated from search engine and advertising services.
- 9. CREDITS: This presentationtemplate was created by Slidesgo, including icons by Flaticon, and infographics & images by Freepik and illustrations by Stories Q1. Why does alphabet own widely different subsidiaries under the same corporate structure? What are the benefits of this choice? And the costs? • Creates more value for the company. For example, YouTube. • Giant corporation and hence gets revenues. • More expensive to have more corporations.
- 10. Q2. What isthe rationale behind the decentralized structure/ Its drawback? Under what conditions this structure is an appropriate organizational design for diversified company? RATIONALE BEHIND DECENTRALISATION • To improve productivity. • Trust among employees and leadership. • Preparing the company for emergencies.
- 11. CREDITS: This presentationtemplate was created by Slidesgo, including icons by Flaticon, and infographics & images by Freepik and illustrations by Stories CONDITIONS FOR DECENTRALISED STRUCTURE IN A DIVERSIFIED COMPANY • In case of expansion because of diversified portfolios. • In order to reduce burden from the top executives. • Opportunity for greater diversification of product lines. DRAWBACKS • Lose control of day-to-day activities. • Different agendas of managers in the same organisation.
- 12. Q3. Is Alphabet’scorporate governance (and in particular the presence of dual class shares) appropriate for the organization? What are the benefits? And the costs? CORPORATE GOVERNANCE Corporate governance is the combination of rules, processes or laws by which businesses are operated, regulated or controlled. Reasons of low Corporate Governance rating of Alphabet: • Restructuring issues • Management style of Nest • Composition of Board of Directors • Presence of Dual Class Shares
- 13. CREDITS: This presentationtemplate was created by Slidesgo, including icons by Flaticon, and infographics & images by Freepik and illustrations by Stories • In August 2014, when Google became public, the demand was lower than expected. • Also inconvenient was the dual structure where Class A shares have the right for one vote, and Class B was reserved for google insiders only and had the right for ten votes. • This is not seen right because people didn’t want to invest because they didn’t have the right to vote.
- 14. Benefits: • Company cantake risky bets on new technology • Protects entrepreneurial management from demands of ordinary shareholders • Ensures loyal investors even during rough patches Costs: • Create an inferior class of shareholders • Ensures reins remain firmly in the hands of promoters • Allows management to make bad decisions with few consequences