Google announced to the official blog that the company is restructuring. A new company is being created called Alphabet, Inc. which will run Google, Inc. as a wholly-owned subsidiary.
What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed.
As part of the restructure, Sundar Pinchai will be the CEO of Google as Sergey Brin and Larry Page move to CEOs of Alphabet, Inc. Sundar has been proving himself and continues to move up the ladder with this latest restructure.
Alphabet, Inc. will be the publicly-traded entity and shares of Google will automatically convert at the same rate while still trading under GOOG and GOOGL. Share prices have jumped significantly in after hours trading.
For Sergey and me this is a very exciting new chapter in the life of Google — the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for! I should add that we are not intending for this to be a big consumer brand with related products–the whole point is that Alphabet companies should have independence and develop their own brands.
We are excited about…
- Getting more ambitious things done.
- Taking the long-term view.
- Empowering great entrepreneurs and companies to flourish.
- Investing at the scale of the opportunities and resources we see.
- Improving the transparency and oversight of what we’re doing.
- Making Google even better through greater focus.
- And hopefully…as a result of all this, improving the lives of as many people as we can.
What could be better? No wonder we are excited to get to work with everyone in the Alphabet family. Don’t worry, we’re still getting used to the name too!