Google announces massive restructuring, ‘Alphabet’ parent company

The Alphabet name was chosen “because it means a collection of letters that represent language… the core of how we index with Google search”. Meanwhile, Page and co-founder Sergey Brin are becoming the new CEO and president at Alphabet.

Like many founders, Page and Brin are more excited about launching new ventures than they are about managing existing ones. As Alphabet Inc. now replaces Google Inc.as the public entity on the Wall Street, hence all shares of Google will automatically be converted into shares of parent company Alphabet.

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.

In addition to Google, Alphabet will oversee Google X, the company’s experimental research lab; Calico, the company’s effort to increase the human lifespan; and Life Sciences, which works on projects like smart contacts for diabetes patients. The new smaller Google will be run by Sundar Pichai, Google’s current senior vice president of products. And it has long since expanded beyond its core business as a search browser, becoming one of the biggest and most far-reaching tech companies on the planet. Page explains the new model will allow more management scale by letting the company engage in new activities that aren’t related to each other.

As you can tell from my colleague Chris Preimesberger’s analysis article, Google’s rationale for creating the Alphabet holding company included providing greater transparency for investors.

Makes me think seriously about going out and buying our family some of that alphabet soup. Google is now one of the subsidiaries under Alphabet’s wing and has acquired a new CEO, Sundar Pichai.

BMW’s Alphabet, which provides services to companies with vehicle fleets, operates in 18 countries and supplies 530,000 vehicles to corporate customers. “This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google”, said Google chief executive Page in a blog post titled “G is for Google” on Monday. YouTube, Google’s massive video service, and Android, the company’s mobile operating system business, will remain part of Google. A CEO will be appointed to each other companies in the collective.

The Mountain View, California, company’s stock was up about 5 percent in after-hours trading following the announcement Monday afternoon, says a source.