All Google shares will be automatically converted into the same number of Alphabet shares, with all of the same rights.
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Explaining the new structure, Page said Alphabet will be a “collection of companies”, the largest of which is Google.
Google will have its own CEO, Sundar Pichai, while co-founders Page and Brin move upstairs.
Google will be one of the units, headed by the current company Vice President Sundar Pichai.
Google has unveiled a surprise restructuring, creating a new parent company called Alphabet Inc. If you have already heard about the new company under which Google will be operating, more questions than answers could be surrounding your thoughts.
“Should Google move to “segment reporting” as referenced in its filing, we would expect to get revenues and expenses for the core and non-core businesses, which should help bring clarity to any profitability drag caused by its non-core assets and their trajectory”, said Goldman Sachs analyst Heather Bellini. The new structure will allow them to periodically create new projects and then hire others – such as Pichai and Calico CEO Arthur Levinson – to handle day-to-day operations of individual companies.
Alphabet will be a massive conglomerate under which Google and other divisions like Calico, Google Ventures, Google Capital, Google X, Fiber and Nest will exist as subsidiaries.
According to several comments from the company’s employees on a Quora thread, people working at Google found out about Alphabet at about the same time as the rest of the world.
The company said the new structure will take effect “later this year”. Alphabet shares will continue to trade on Nasdaq under the same tickers, GOOGL and GOOG.
2004: A few months after introducing Gmail, Google holds its first public stock offering.
“Sergey and I have been super excited about his progress and dedication to the company”. Page has suggested previously that he is a fan of Warren Buffett, the famed financier and CEO of Berkshire Hathaway. Each of those will have a separate CEO.
If you’re searching for reasons why Google has renamed itself Alphabet, here’s one: It positions the tech company to expand into health care, which could be very healthy for its long-term fortunes.
“We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!” Android, YouTube, search and ads will continue to remain an integral part of Google, and Pichai and his team can concentrate on developing them further.
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“Google is smart enough to know what they’re doing based on trademark law”, says Rudy Telscher, an intellectual property attorney at Harness Dickey, who adds that it’s possible a company in a similar industry with a similar name could have a prior claim to the trademark. Google stocks shot up by 5% immediately after the announcement. Fortunately for now, it seems that nothing will change in the near future, which means that you will be able to use any of the company’s services without having to worry as much.
