Google, at least Google as you’ve come to know it, is no more. Google co-founder Larry Page announced today the upcoming arrival of Alphabet, a company Google is creating that will see Page serving as CEO and his partner Sergey Brin serving as President. Alphabet is essentially a holding company that will encompass “a collection of companies”, including Google itself — a version of it said to be “a bit slimmed down”, as companies that have been part of Google but separate from its main Internet products will now fall under Alphabet instead.
Said Page in a statement today, “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.”
He explains that companies that are “pretty far afield” from Google’s main products like Calico, which focuses on longevity, and Life Sciences, which is developing a contact lens, will henceforth be contained within Alphabet. The move is one that, in part, will allow for more independent operations. A “strong CEO” will run each business, with Page and Sergey dabbling in them all as needed.
Under this, Sundar Pichai will become the new CEO of the “slightly slimmed down Google”, and in the process will free up Page for other projects. Other management changes weren’t specified.
Other changes include Google reporting its Q4 financials in segments, with the Google financials being broken off from the other businesses running under Alphabet. In addition, Alphabet Inc. will take the place of Google Inc. as the publicly traded entity, and Google shares will, like magic, automatically transform into an identical number of Alphabet shares. Says Page, “Google will become a wholly-owned subsidiary of Alphabet.”
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!