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.
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“Our company is operating well today, but we think we can make it cleaner and more accountable”, Page wrote on Monday in a blog post.
“I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President”.
Larry Page said that the new structure will allow the companies under Alphabet to become more independent, take risks and develop their brands. 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.
Alphabet will be composed of all the core businesses of Google, which include maps, Internet search, YouTube, apps, ads and Android together with the new businesses, Fiber, Nest, Google Ventures, Google Capital, Google X and Calico. Google co-founders Larry Page and Sergey Brin have stepped themselves up as the CEO and President of Alphabet.
Many business analysts likened Alphabet to some of history’s biggest and most successful conglomerates. Sundar Pichai, formerly the top man of Chrome OS and Android, steps up as CEO.
“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related”, Page said.
Alphabet will be the parent company presiding over distinct entities, of which Google is to be the largest initially. The name also consists of the word “alpha” which means an active return in the investment industry.
While we’ve got an Alphabet: everything you need to know guide already posted, it became apparent over the past few hours that we needed something else, too.
As of this writing, Google has practically covered nearly all letters in the alphabet with its acquisitions and other side projects.
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Google is arguing that the shift means Google itself can focus on its core business and revenues (i.e. all that money in advertising) while the more experimental businesses can break free of the Google brand and become their own thing. Google shares will be converted into equivalent stock holdings in Alphabet, with the same rights – or lack of them.
