Google gets to grips with ABCs, rebrands parent company Alphabet

Google owns plenty of other companies, very few of which have anything to do with search. Within that context, the decision by the internet giant to create a new parent company makes sense.

Called Alphabet, the new entity was announced by Page, who will be its CEO, in an official blog post. According to the post, Google co-founder Sergey Brin will serve alongside Page as president.

In the post, Page also revealed that the launch of Alphabet would mean a “slightly slimmed down Google”. This is largely due to the fact that the companies that are “pretty far afield” of Google’s main internet products are contained in Alphabet instead.

That includes companies like Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity).

“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” Page writes. “Alphabet is about businesses prospering through strong leaders and independence”.

As part of that, each company will have its own CEO, starting with Google.

In the post, Page announced that Sundar Pichai would be taking over as CEO of the new, leaner Google. Born in India, Pichai has been at Google since 2004, where he led the product management and innovation efforts for a suite of Google’s client software products, including Google Chrome and Chrome OS, as well as being largely responsible for Google Drive. More recently, Pichai has also been responsible for overseeing Android in the wake of Andy Rubin’s departure from the company.

According to Page:

Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I’ve been tremendously enjoying our work together. He has really stepped up since October of last year, when he took on product and engineering responsibility for our Internet businesses. Sergey and I have been super excited about his progress and dedication to the company. And it is clear to us and our board that it is time for Sundar to be CEO of Google.

Each company within the Alphabet stable will similarly have a CEO handpicked by Page and Brin, who will also determine their compensation.

Indeed, the Google founders will handle the financial allocation for each of the Alphabet companies and oversee how they are executing as businesses.

The financials of each Alphabet business will apparently also be included as separate items in Google’s quarterly results.

The new structure is designed to allow Page and Brin to accelerate the growth of businesses formerly within the Google structure.

“Sergey and I are seriously in the business of starting new things,” Page writes.

He adds that “Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure”.

According to Page, the name Alphabet was chosen 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!”

Another reason they went for the name, he adds, is “that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!”

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.

At this stage, there is no intention for Alphabet to exist a standalone consumer brand with its own products. According to Page, “the whole point is that Alphabet companies should have independence and develop their own brands”.



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