The founders of Google have launched a new company in an effort to be cleaner and more accountable.
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Page and Brin would have found out that now the business name Alphabet is trademarked and owned by BMW and BMW has already said they’re not selling it. BMW also owns the domain name for Alphabet.com and has no plans on selling that either. They will be free to invest in new projects without encountering interference from other company divisions or investors looking over their shoulders, anxious that they are wasting energy and time on various projects. Google is now one of the subsidiaries under Alphabet’s wing and has acquired a new CEO, Sundar Pichai. The major large search giant Google has announced a parent company Alphabet Inc by restricting all the associated companies. “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.
“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related”, he said.
Google is re-organising to create a leaner organisation, and its healthcare operations have a central place in the new structure.
With the reorganization, Page signaled he wants to give more authority to CEOs of the companies that will be part of the new entity known as Alphabet. The Alphabet shares will still trade under the GOOG and GOOGL symbols on NASDAQ. Alphabet will oversee eight firms including the search engine Google.
“We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!”
The move will also likely provide a bit more transparency over the financial performance of individual businesses within Alphabet, rather than just lumping it all in with Google, and Alphabet’s experimentation could get more funding than it otherwise would have when included in with the core advertising business. Companies that will move to direct control of Alphabet – essentially in equal rank to Google – will include Google Fiber, Google Capital and Google X, as well as recent acquisitions such as Nest, Calico and Life Sciences. But Google may be about to experience its most drastic change to date.
Based on Mr. Page explanation, a legal dispute related to the Alphabet trademark is unlikely.
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Notably, right after the announcement, shares of Google saw a spike of 5 percentage points and rising even further to 6 percent during after-hours trading.
