Monday brought with it an announcement from Google that it would be rebranding itself and forming a new holding company named Alphabet. Alphabet will manage a group of companies, the largest wholly owned subsidiary of which will be Google. Co-founders Larry Page and Sergey Brin announced the far-reaching shake-up of Google’s corporate structure and management via a blogpost after the stock markets had closed.
The changes involve giving control of its core search engine business to executive Sundar Pichai, who will replace Larry Page as CEO. Pindai was formerly the head of Android followed by being Google’s product chief since October 2014. In Page’s blogpost, he said of Pichai, “I feel very fortunate to have someone as talented as him to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations.”
The change comes in the context of Google’s increasing forays into areas beyond its core search engine. In recent years, the company has launched numerous leftfield projects such as autonomous cars, internet-delivering balloons and smart home devices. The restructuring will provide investors with greater insight into how company money is being utilized. It may also protect the company somewhat from regulatory issues, especially in the EU.
Page explained that companies that are “pretty far afield of our main Internet products” will be organized within Alphabet. Non-Google divisions of Alphabet will include X lab (the innovation division) and Wing (for drone delivery) and Nest (its Internet of Things division); in addition to health efforts such as Calico and Life Sciences.
Additionally, the company’s investing branches like Google Ventures and Google Capital will also be managed outside of Google proper, as will Google Fiber, the company’s broadband branch. Page said that the restructuring “allows us more management scale, as we can run things independently that aren’t very related”.
Page will become the CEO of Alphabet and Brin will be its president, while Eric Schmidt becomes Executive Chairman. The CFO will be Ruth Porat who will also retain her CFO role at Google. David C Drummond will be the secretary and chief legal officer.
Most aspects of Google that consumers interact with will remain a part of the “slimmed down” Google 2.0, including YouTube, Gmail, Android and Maps, in addition to the core search and advertising business.