Google unveils surprise restructure

In a surprise move, Google shocked the tech world by announcing its new parent company and corporate restructuring.

With Alphabet as a holding company, the other businesses within Google will be split out as independent operating entities with their own CEOs, financial structures and independence.

Based on Mr. Page explanation, a legal dispute related to the Alphabet trademark is unlikely. Alphabet will be a “collection of companies” that generally fall outside Google’s main sphere of interest. In general, our model is to have a strong CEO who runs each business, with Sergey [Brin] and me in service to them as needed.

“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes”, Page writes in his post.

The projects include self-driving cars, Google Glass, Internet balloons, drones, health care, Google TV, mobile payments, home automation and its Google+ social network, among others, none of which have become successful. He also noted that alpha-bet means (Alpha is investment return above average) is what they are striving to accomplish.

On Monday, Google announced the creation of a new company – Alphabet – to rule over Google and its various offspring.

While the move is primarily meant to make the company’s operations more transparent, it has implications for each of the core businesses, says Francesco Radicati, senior analyst at Ovum.

Clearly separating Google from other ventures could give the CEO of each company the ability to focus on their unique areas of expertise.

Alphabet will still hold on to the existing GOOG and GOOGL tickers to identify its two classes of shares on the NASDAQ market. As for Google, which he was previously heading, the company will now be headed by Sundar Pichai, previously chief product officer at Google.

Shareholders responded positively to the news, with Google stock jumping more than 6% in after-hours trading to a premarket price of more than $705 per share by early Tuesday morning. More pleasant news for the Indians was the promotion of Sundar Pichai, an Indian American, as the CEO of a slimmed-down Google.

Do note though, that since Google does not plan to do any business with the name “Alphabet” and more through the subsidiaries, this might not really become that big an issue for.

Ever since Google’s announcement of Alphabet on Monday, the alphabet.com website has experienced downtime due to high traffic.

“There is no dearth of visionary founders in the valley but he tops them all”, Ram Shriram, a founding Google board member and venture capitalist, told me previous year.