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When Google announced the creation of Alphabet, its new umbrella organization that separates Google’s “bread-and-butter” businesses like Google Search and YouTube from riskier or non-core ventures like GoogleX and Google Capital, shareholders rejoiced. As Todd Zenger writes in his recent HBR piece, “Why Google Became Alphabet,” investors were somewhat uneasy with Google’s approach of mixing unrelated investments, acquisitions and businesses, because it appeared to limit transparency, accountability and discipline. There were also branding benefits to the change, as Kevin Lane Keller explained in another article.

But let’s think about Google’s move from a strategic perspective: What does the creation of Alphabet tell us about the company’s strategic motives?

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