Google to establish Alphabet holding company

At its most basic level, Google is just renaming itself “Alphabet” and creating a subsidiary business called “Google”. As recently reported by ValueWalk, Wall Street has been supportive of the change in corporate structure, and a number of analysts have recently announced upgrades on Google relating to the move.

Google’s journey, from the all-encompassing internet giant, to a streamlined and focused firm underneath the umbrella of Alphabet will be completed today. The move allows founders Sergey Brin and Larry Page maintain voting control of the company, while enjoying the liquidity of the public markets. Moonshot businesses such as Nest, Google Ventures, and Google Life Science, among others will fall under Alphabet, the company said. Google will still trade as GOOG or GOOGL, though probably not for long.

Starting from the company’s fourth quarter in January, Alphabet will have two reporting units – Google and all other Alphabet businesses taken as a whole. Google has always been a search engine and advertising business at its core but over the years it’s grown into a company with diverse interests ranging from self-driving cars to home automation systems.

“Our company is operating well today, but we think we can make it cleaner and more accountable”, Page said in a blog post in August when he announced the reorganization.

It is unlikely that this will affect the day-to-day operations of Google and Alphabet’s products and services, but in the future if you do start seeing the name pop-up, understand that it is actually Google’s new parent company and hopefully it won’t be too confusing. Ruth Porat, now the CFO of Alphabet, had said that she wanted to add more transparency to Google’s business. Another example of an Alphabet-held company is the X lab, which is incubating Wing, a delivery-by-drone initiative.