The rise of low-key styled Google CEO Sundar Pichai

Page even called out the new company’s responsibility to investors in a blog post announcing the new name: “We also like that it means alpha-bet (Alpha is investment return above benchmark)”, he wrote.

“In some ways, the best way to prevent itself from being blown up from the outside is to blow it up from the inside”, former Google Plus designer Chris Messina tells Business Insider.

In creating the new company Alphabet, Google co-founder Larry Page took a cue from Warren Buffett – one of his longtime heroes.

How does Alphabet affect Google’s legal challenges?

“Investors have always complained that Google spends quite a bit on capital expenditure for these moonshot programs like Google Glass with no real revenue to show for it. This is a way they can keep having that profitable arm, and then kind of prove and have a little more transparency and clarity about what their spending is”. Being the biggest subsidiary of Alphabet, Google will maintain control over services such as Gmail, Photos, YouTube, Maps, Android, the Google Play Store, and others. If Larry Page and Sergey Brin, Google’s co-founders, have it all their way, Alphabet’s future clout could be well over and above the individual parts that make up their empire. Berkshire Hathaway runs much the same way: It owns companies like Geico and Dairy Queen and has minority stakes in Coca-Cola and American Express.

In that light, the benefits are rather clearer. 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.

It’s the issue of focus that is at the centre of Alphabet’s creation, I feel. It will accelerate the pace of change within a company that was in danger of faltering because of its size.

Earlier, the company had difficulties in explaining how a search company develops a self-driving vehicle or research on life sciences.

Shortly before his death, Jobs met with Page for a final time, and the two continued to disagree over the need for laser-like focus. By handing the core Google business over to Pichai, who has been effectively running day-to-day operations since last autumn, the founding duo are freed from having to look after their accomplishments and innovations from the past.

“For example, if a unit is doing well or badly they can dial it up or down, they can form partnerships or different companies”, he said.

Page will be the CEO of Alphabet, while Brin will be the president.