This corporate structure also enabled these divisions to access corporate resources when they needed them and corporate support for really big projects or ventures that grew beyond the reach of a single division.
When I was young, I got to see just how such development worked. My grandfather was the general manager of General Electric's Erie, Pa., locomotive plant, and shortly before he retired, he took me onto the shop floor to see what was then a very new idea in rail power. The idea was a railway locomotive that used a gas turbine to generate electric power, which then pulled a train.
Those massive engines were unlike anything seen on the railways until then and while they were ultimately unsuccessful, it's important that GE gave that division the ability to invent something new in hopes it would succeed. But it also got permission to fail.
After my walk through the production floor at the locomotive plant, my grandfather took me to his office and showed me the plans for an even more powerful locomotive engine that would be the most powerful the world had ever seen.
My grandfather retired before that more powerful engine ever saw service, but what he explained to me at the time has always been one measure of success.
He said that when he first went to work for GE, the founder, Thomas Edison, impressed on him the need to allow people to be free to innovate. That freedom to innovate is what allowed GE to build that new type of locomotive, along with groundbreaking innovations in more industries than I can count.
What I see in the formation of Alphabet is the same kind of freedom. While Google has always been an innovative company, it's sure to be hard for a manager who understands search engines to also understand how to run a company that develops transportation systems.
It's just as hard for that manager to understand all the intricacies in the development of wearable computers. Each of those vastly different businesses needs people who understand how to apply the technology, but they also need the resources brought to them by the much-larger holding company.
Does this suggest that Alphabet is on its way to becoming the next General Electric or
Hewlett-Packard? Perhaps it is, although right now it's too early to tell.
But if Google is to become such a company, then Larry Page and Sergey Brin are on the right track. And Alphabet is on its way to becoming a world-class competitor and a great corporation that will be around for a long time.