California – Google has announced a sweeping reorganization that will create a new holding company called Alphabet, to be led by Google co-founders Larry Page as CEO and Sergey Brin as President.
Alphabet will be the umbrella company of the tech giant’s extensive portfolio, with Google as its largest subsidiary helmed by its new CEO Sundar Pichai.
Google will be slimmed down to include search, ads, maps, apps, YouTube, and Android, separating businesses that aren’t very related to Google’s main Internet products.
The new structure will give Page and Brin more space and control to chase disruptive ideas that can grow the business while also giving investors clarity on what industries and technologies Google is investing in.
Some of the companies in Alphabet’s portfolio include Calico, a biotech company looking into longevity; Wing, a drone delivery service; and even a start-up investment arm called Google Venture and Google Capital.
Each of these ventures will have its own CEO and leadership, with Alphabet replacing Google as the publicly-traded entity. In addition, Google financial results will be reported separately from Alphabet as a whole starting in the company’s Q4 earnings report.
“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,” Page wrote in a post to the official Google blog.
Why call it Alphabet? Page adds:
“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.”
The name of the holding company may also suggest functional wordplay, with each company under Alphabet ideally representing a letter in the English Alphabet:
- Alphabet
- Boston Dynamics (creates robots that look like animals)
- Calico (focused on longevity)
- Google Capital (investment)
- D
- E
- Fiber (gigabit internet provider)
- H
- I
- J
- K
- Life Sciences (“change healthcare from reactive to proactive”)
- M
- Nest (smart homes)
- O
- P
- Q
- R
- S
- T
- U
- Google Ventures (investment)
- Wing (drone delivery)
- X lab (innovation lab)
- Y
- Z
