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Google Shakes Up The Organization And Creates A New Umbrella Company

Alphabet

In a move that probably some employees at Google didn’t even know was happening, Google is beginning a major reorganization of the company. Starting now, Google prior is a subsidiary of the new Alphabet corporation.

With this restructuring, some executive shakeups are taking place. Larry Page will become Alphabet’s CEO, and Sergey Brin will be the president of Alphabet. Sundar Pichai will now takeover as the CEO of Google, the now subsidiary of Alphabet.

With this change, the core businesses are affected as well. The new Google will be smaller, but still contain vital Google services such as Gmail, Google Maps, search, YouTube, and various others.

Other parts of Google will now run as separate subsidiaries of the new Alphabet company, such as the following:

  • Calico, an anti-aging biotech company
  • Sidewalk- they are focused on smart cities
  • Nest – the makers of the air conditioning unit and smoke detectors
  • Fiber- Google’s testing of selling Fiber internet to consumers
  • Google Ventures and Google Capital – These fund fledgling companies, such as Uber, SurveyMonkey, and others
  • Incubator projects – Google X, which is developing self-driving cars and delivery drones

Google’s stock ticker options will remain traceable on on Nasdaq as GOOGL and GOOG. Of course, Larry Page stated some reasons as to why Google is changing their entire structure:

“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant. Our company is operating well today, but we think we can make it cleaner and more accountable.”

Larry Page also outlined why the new company is named 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.”

In a filing with the US Securities and Exchange Commission, Google has outlined how this reorganization will take place:

“Later this year, Google intends to implement a holding company reorganization (the “Alphabet Merger”), which will result in Alphabet owning all of the capital stock of Google. Alphabet will initially be a direct, wholly owned subsidiary of Google. Pursuant to the Alphabet Merger, a newly formed entity (“Merger Sub”), a direct, wholly owned subsidiary of Alphabet and an indirect, wholly owned subsidiary of Google, will merge with and into Google, with Google surviving as a direct, wholly owned subsidiary of Alphabet.”

So there you have it. Google is no longer one behemoth, but a number of pieces under a (somewhat different) organization style. It remains to be seen if this helps Google, but only time will tell. What do you think of this reorganization?

Source: Alphabet, Google via Android Central