This was the idea of alphabet - Google the search engine is one of the companies Alphabet holds. Google is an established company that can be milked but revenue has probably grown as much as it can.

To continue to show growth, alphabet planned to bet a moderate investment on entering new sectors with huge growth prospects, making medium term investments by buying leading companies and giving them the funding they needed to get ahead.

This is why Google no longer does stuff like Google X, 20% time etc - as a subsidiary they have got out of the innovation business, at least any more than other established companies.

Alphabet makes more sense when you read it as Alpha Bet - http://www.investopedia.com/terms/a/alpha.asp