Google has announced the launch of a new company called Alphabet, as well as deep restructuration of its leading team with Larry Page becoming CEO, Sergey Brin President of the new company and Sundar Pichai CEO of Google.
In October 2014, Pichai took on the product and engineering responsibility for Google’s Internet businesses.
“In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation. In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole,”Larry Page said in the Google Blog post on this point published today
“Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG,” he explained.
Page also wrote in the post that although Google “is operating well today,”…”we think we can make it cleaner and more accountable. ” an that is Alphabet aimed to, letting Google keep focussed on the Internet products.
What is Alphabet?
“Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead,” Page underscored and quoted Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity) as two of the many business “far afield”from Google’s focus.
He pointed, as well, that Alphabet will also include the X lab, “which incubates new efforts like Wing, our drone delivery effort. ”
The investment arms, Ventures and Capital, will be integrated as independent companies in Alphabet.
” Fundamentally we believe this allows us more management scale, as we can run things independently that aren’t very related,” concluded Page.
Why the name Alphabet?
“For Sergey and me this is a very exciting new chapter in the life of Google — the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!. I should add that we are not intending for this to be a big consumer brand with related products. The whole point is that Alphabet companies should have independence and develop their own brands.”
Image above the headline (left-right).- Larry Page (CEO Alphabet); Sergey Brin (President of Alphabet) and Sundar Pichai (CEO Google). © Google.
