By John Kell and Alan Murray
October 2, 2015

When are two companies better than one?


Alcoa this week announced it was splitting in two, separating the business of making aluminum from that of crafting “value-added” parts for airlines, autos and other industries. Meanwhile, the Hewlett-Packard board formalized plans to split its printer and personal computer business from its server and data business.


The justification for such splits usually comes down to two arguments: 1) “unlocking value” and 2) “improving focus.” The first assumes investors aren’t smart enough to properly value two very different businesses run by the same company. The second assumes managers aren’t good enough to run two very different businesses at the same time.


There may be truth to both arguments. But I like the fact that Google is taking a different approach in its creation of a new company, Alphabet, that Larry Page says will allow it to “run things independently that aren’t very related.” The first response of most people to the Alphabet announcement was to scratch their heads. The Wall Street Journal takes a more serious look at the strategy this morning.


Google is an anomaly – “not a conventional company,” as Page puts it. Its peculiar approach to solving the challenge of running disparate businesses under one company may be relevant to no one else. But the painful process of splitting and merging businesses also has its limitations – for everyone, at least, besides the investment bankers.


I’ll be interviewing Page on his unique approach to business on opening night of our Fortune Global Forum in San Francisco November 2. This CEO-only event is by invitation, but let me know if you are interested (CEO Daily readers get special consideration.) We will also cover it thoroughly on


Enjoy the day.





Alan Murray


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