Google has unveiled a new organisational restructure, creating a new company Alphabet, of which Google will be a subsidiary.
The actual internet/search engine structure of Google will remain unchanged and will be a company underneath Alphabet, sitting alongside other non-online businesses Google currently undertakes. The new structure sees Alphabet become a collection of companies, in which Google is just one of them, albeit a large one.
The announcement was made via a blog post from Google co-founder Larry Page, both on the official Google blog as well as the new website for Alphabet. The source of M+AD’s story is Australian site B&T.
“Alphabet is mostly a collection of companies,” Page says in his post. “The largest of these, 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).”
This means the company will be able to have more management control, and able to run various companies separate to Google, said Page.
Explaining the thought process behind the change, Page said companies have become comfortable making very small changes, however in a tech space changing as rapidly as the one today, “you need to be a bit uncomfortable to stay relevant”.
When co-founding Google 11 years ago, Page and Brin said: “Google is not a conventional company. We do not intend to become one.”
Page will be ceo of Alphabet; Google co-founder Sergey Brin is president.
“For Sergey and me this is a very exciting new chapter in the life of Google – the birth of Alphabet,” wrote Page.
“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!”
The model, he says, will have one ceo at the helm of each business, “with Sergey and me in service to them as needed”.
“We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great ceo for each business, and we’ll determine their compensation.
“In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole.”
When it comes to the stock market, Page said the name Google Inc will be replaced by Alphabet Inc, with all shares converting to Alphabet. Google is now a subsidiary of Alphabet.
The two classes of shares, Google and Alphabet, will still trade on the US stock exchange NASDAQ under GOOGL and GOOG.
B&T reports that Already Page’s Wikipedia page has been changed to reflect his new role as ceo of Alphabet, with a brand new page dedicated to Alphabet.
- Read Page’s full announcement here
- Read the full B&T story here
- The Guardian story here
- Wired story here
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