Under the changes, announced Monday, Google co-founder Larry Page will become CEO of Alphabet. 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.
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“I feel very fortunate to have someone as talented as he is to run the slightly slimmed-down Google and this frees up time for me to continue to scale our aspirations”, wrote Page.
Larry Page will be Alphabet’s CEO and Sergey Brin will be the President.
The general reaction to Google’s announcement that it would create a new holding company called Alphabet, of which Google would be a subsidiary, was one of surprise and approval. The segment’s CEO will be Sundar Pichai, an 11-year Google veteran who was head of Android and Chrome before being promoted in October to run all of Google’s core products.
Under the change, which was announced on Monday, a new parent company will be created called Alphabet.
All the group companies including Google will come under Alphabet; however, it won’t put any effect on Google shares. Android, YouTube, search and ads will remain part of Google Inc. There’s every indication that this means Google+ will also continue to reside within Google, rather than be spun-out as a separate Alphabet company. Wall Street has seized on this as showing that Page and Alphabet president Sergey Brin are becoming the “Berkshire Hathaway of the Internet.”
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He added that they settled on the name “because it means a collection of letters that represent language, one of humanity’s most important innovations”. All the new companies will have a newly appointed CEO. Google’s approach to taxation is increasingly in focus both in the United States and more recently in Australia, with Google reportedly negotiating a 10% tax rate on its profits in Singapore recently. The company says its new structure will give more independence to many of its wide-ranging and ambitious projects. The reorganization is aimed at letting the various units operate independently, letting their respective leaders focus on their own individual projects. 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. Google’s venture arm has made investments and acquisitions much earlier and more diverse than what many corporate venture tech companies have done.
