Google to restructure into new holding company called Alphabet

Mr Page will become chief executive of Alphabet, with senior vice president Sundar Pichai becoming CEO of Google.

Co-founder and current CEO Larry Page announced on Monday, “Our company is operating well today, but we think we can make it cleaner and more accountable”.

Larry Page will become the CEO of a company called Alphabet, an umbrella operation.

“That they chose to brand it Alphabet, rather than any endorsed creation, say “Google holdings”, “Google Enterprises” or “Planet Google” is an indication of the level of risk they intend to take with their increasingly diversified ventures”, says Uri Baruchin, strategy director at The Partners. Google’s corporate motto is famously “don’t be evil”, although that hasn’t stopped the company from getting into strife with the European Union, which has been trying to break up Google for years, over its market dominance, or being criticised by various countries (including Australia) for not paying much tax.

This means companies such as Life Science, which works on the glucose-sensing contact lens, and Calico, which is focused on longevity, now come under Alphabet, as do Google Fiber, Google X, Google Ventures, Google Capital and Nest. “We believe this allows us more management scale, as we can run things independently that aren’t very related”. “Alphabet is about businesses prospering through strong leaders and independence”, Page wrote.

Page also revealed that Alphabet Inc. will now replace Google Inc.as the publicly traded entity and all shares of Google will now automatically convert into the same number of shares of Alphabet.

Never one to embrace the formal duties of running a tech giant, Page prefers to look beyond the pillars in front of him, so he can position Google for the future.

The new Google will comprise search, apps, YouTube and Android. Deutsche Bank restated a “buy” rating and issued a $780.00 price target on shares of Google in a research note on Monday.

“This is a pretty assertive move on their part”, said Bob O’Donnell, who heads the consultancy TECHnalysis Research. The world’s largest Internet search provider is a frequent target by companies claiming it is violating their patents.

Now, only a day later we already have our first potential problem with this: it may actually wind up infringing on trademark rights owned by BMW, according to a report out from the New York Times.

Google has always been quite willing to engage in these kinds of activities and Page points to Google Maps, Chrome, and Android as evidence that they’re worth doing.

Trip Chowdhry at Global Equities Research called the move “very positive” because it increases transparency for investors. And to keep the CEOs of its newly “independent” businesses happy under their alphabetical overlords. This of course had Google’s shares soar by four percent in after hours trading following the announcement.