Larry Page will become Alphabet’s CEO, while Google’s co-found Sergey Brin will become the new holding company’s president, with Eric Schmidt as executive chairman.
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Mr. Page, in a blog post, announced the formation of the new parent company Alphabet, of which he will be the CEO and Google co-founder Sergey Brin will be its President. Technically, they still will, but they’ll have a level of detachment that should make their jobs (and their company) more manageable. “We [have done] a lot of things that seemed insane at the time”, Page said, noting that the Alphabet strategy gives Google more flexibility to innovate.
As Alphabet Inc. will replace Google Inc.as the publicly-traded entity, Google shares will convert into the same number of shares of Alphabet.
As the company explained in its filing to the US Securities Exchange Commission on Monday, the “Google Business” will be home to the company’s search engine, ads business, maps, applications, YouTube and the Android operating system.
The sudden reorganisation of Google under newly formed parent company Alphabet gives the technology giant the ability to focus on its core business, while offering startup-like flexibility to its other projects.
“We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for”, he added. To no surprise this will be top Google exec Sundar Pichai. Instead, he is creating Alphabet because he believes he can invest Google’s billions of dollars in annual profits more effectively than Wall Street can.
In a recent but well planned move, the founders of Google have formed a new conglomerate company called Alphabet. In a memo to investors, Page said he wants to make the company “cleaner and more accountable”.
Google launched its re-branding this week to huge interest, announcing that the main company would change its name to Alphabet and that Google will just be one company underneath that umbrella. The new divisions include an effort to prolong human life, a venture building high-speed Internet networks in several cities, a drone delivery service, and the research lab designing a self-operating automobile.
The upcoming Q4 results will introduce segmented reporting, meaning Google financials will be released separately from the other Alphabet businesses.
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Google’s Internet business and innovation ventures are getting so big, executives have decided a new company is needed to oversee them. Google shares soared 5 percent in after hours trading yesterday as the news of the restructuring broke.
