New parent company Alphabet created to streamline Google

Google’s new operating structure will emulate that of noted U.S. financier Warren Buffet, who owns dozens of companies through his Berkshire Hathaway holding company, all of which operate independently.

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For investors, Google shares will now be Alphabet shares, although the ticker symbol will still be GOOG.

Google’s co-founders Larry Page and Sergey Brin have set up a new company called Alphabet, which Google itself is now housed under. He was responsible for or had a major role in numerous new products and features Google introduced during this period and this has been well recognised. If so little is changing other than the name, why bother with the transition?

“However it appears to be an effort by Page and Brin to remove themselves from daily Google operations and focus on a wider range of projects at a higher level”.

When it comes to the appointment of Pichai as Google CEO, Mr. Page said, “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”. This means Google financials will be provided separately from the other companies under the Alphabet umbrella.

Alphabet will include units focusing on life sciences products, such as a glucose-sensing contact lens, and the health research firm Calico, Page said. “Many of the decisions surround the separation of these other investment subsidiaries have yet to be finalized (and) no details have been reported”.

The restructuring has come as a bit of a surprise for many, and more details can be expected over the next few weeks. “I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President”.

We will rigorously handle capital allocation and work to make sure each business is executing well.

With the launch of big brands such as Google under these new top-level domains, the uptake of the market and consumer awareness of the new domains is expected to accelerate. Another objective behind implementing this new structure is to put the segment reporting in to action for Q4 results. While all of these tech companies began as entities focused on one main business, online bookselling or a social network, for example, many have diversified over the years into numerous side businesses including cloud computing, photo sharing and even satellites.