Buffett runs a very diverse set of businesses that are all independently controlled through a single parent company.
Larry Page will be Alphabet’s CEO and Sergey Brin will be the President.
Each Google company will now have its own CEO.
Under the new setup, Google will have Sundar Pichai, who is the Senior Vice President of Product, as its new CEO. “Our company is operating well today, but we think we can make it cleaner and more accountable”, Page said on Google’s public relations Web site. Instead, he is creating Alphabet because he believes he can invest Google’s billions of dollars in annual profits more effectively than Wall Street can. He was then tasked with supervising all the Google Apps, which included G-Mail and Google Drive and finally given the full control of Android itself. In this position, he was already in charge of Google’s biggest front-facing products and services: Android, Search and Chrome. Google China moved its servers from mainland China to Hong Kong in 2010 when the company refused to comply with search censorship.
Alphabet will also oversee Google Ventures and Google Capital, two investment entities that focus on early and growth-stage start-ups, and analysts said the group’s new structure could make it easier for Google to sell some of its unrelated businesses, or buy new ones.
Subsidiaries such as Google X, which develops projects such as contact lenses, self-driving cars, internet weather-balloons and Google Glass will report separately from the core Google business. She described the website as a “very active” part of Alphabet’s business.
Page suggests that Google was becoming too diversified for its own good, and having a plethora of scarcely related businesses were making it a rather fat animal. Alphabet was founded in 1997, so it remains to be seen if BMW and Google will agree on the name transfer. A CEO will be appointed to each other companies in the collective.
Deutsche Bank put a target of $840 on the shares, with its head of internet and digital media equity research, Ross Sandler, saying: “There is significant upside from current levels”. The Internet giant operates a multitude of units, so becoming a holding company is reportedly more ideal as it gives Google the chance to organise its units better.
Page said: “Sergey and I are seriously in the business of starting new things”.
Unsuccessful ventures won’t be associated with the Google name, while successful ones will be more easily tied into the overall brand once they’re established.