“So we are creating a new company“, Page said, adding that while they had a history of doing things that appeared “crazy” at the time, many of their projects now have over a billion users, including Google Maps, YouTube, Chrome, and Android. It will also give investors better visibility into the core business of search, something that investors love, and which was reflected in a 6% surge in Google’s share price soon after the announcement was made.
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Google’s new operating structure will emulate that of noted U.S. financier Warren Buffet, who owns dozens of companies through his Berkshire Hathaway holding company, all of which operate independently.
Most would have heard of Google’s self-driving cars, and the Google Glass. “This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead”. Page said in his blog post that, “Alphabet is about businesses prospering through strong leaders and independence”. Sergey Brin will be the president and Eric Schmidt will become executive chairman. Google’s current directors will become directors of Alphabet. But for now they will remain the same.
The Paper, a government-run news website, even named the parent companies’ new website address in its report, saying the unorthodox mix of letters “broke with convention”. Pichai previously served as senior vice-president of product at Google.
Google isn’t just the apps and websites you may regularly use – it’s also a handful of research, tech and health companies. For the moment, that includes Fiber, it’s phone network; Life Science, which develops a smart contact lens; Nest, the connected home business; and X Lab, the secretive, experimental division that works on products like drone delivery. Ruth Porat, the company’s chief financial officer who joined from Morgan Stanley this year, has promised to make it more accountable. But Alphabet is, as noted earlier, already much more, and it probably wants to be a lot more, given the way its fundamental internet, analytics and machine-learning technologies are reshaping literally every aspect of the world.
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The structure was announced after the close of stock market trading.
