“This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google“, said Google chief executive Page in a blog post titled “G is for Google” on Monday. Its largest company will be Google, which will be reduced, removing companies that do not belong to its core Internet business.
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Google’s head of product, 43-year-old Sundar Pichai, will become the CEO of Google.
Google shares have risen by about 4.1% on Wall Street after investors welcomed news of its restructuring.
The search engine giant will now trade as Alphabet Inc, with ventures such as Android, Maps and YouTube remaining under the Google umbrella.
Brin also cited the “amazing progress” being made by new services such as Google Photos and Google Now, which compiles information such as weather and directions tailored to individual consumers’ needs.
Being the new chief, Google’s advancements in machine learning will also be under Pichai’s leadership and bring the power of supercomputers into smartphones.
Page said the name “Alphabet” appealed to Google because it means a collection of letters representing language, and language forms the core of Google’s search indexing.
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!”
“It is clear to us and our board that it is time for Sundar to be CEO of Google”.
Larry Page will now play the top role at Alphabet while Sergey Brin will act as president of the newly formed entity. That will include divisions like Life Sciences and Calico, which tend to focus on moonshot goals such as developing glucose-sensitive contact lenses or extending the human lifespan.
Google’s move is the most significant step by a Silicon Valley giant to get a handle on the sprawl of businesses that it has entered, an issue that increasingly afflicts other technology companies such as Facebook and Amazon. BMW also owns the trademark Alphabet. While it had maintained leadership in Internet search and had been benefiting from web advertising, analysts said that its shares showed that the company is struggling after reaching an all-time high in 2014. “So we are creating a new company, called Alphabet (http://abc.xyz)”, Alphabet CEO Larry Page announced in a blog post on blogspot-where else-on Monday.
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The Alphabet plan is to have more management scale by appointing strong CEOs for each business, and running various operations independently without them having to be very related.
