Google just dropped a bombshell announcement that the operating structure of the company is getting seriously shaken up. To start, co-founder Larry Page broke the news of Alphabet: a new holding company which Google will operate under moving forward. Page will operate as the CEO with Sergey Brin as President effective immediately.
That means Google is now a subsidiary of Alphabet, which Page is calling “mostly a collection of companies.” Google will now solely focus on its Internet products and some of the other projects it has been working on (like the Life Sciences glucose-sensing contact lens) will operate within Alphabet, at least for now.
Page also mentioned it was extremely important that each company have its own CEO. With him as CEO of Alphabet, Google is left with a spot for the position – and that spot is being filled by Sundar Pichai, who previously fulfilled the role of director of product management.
Not much is changing in the form of branding. Google Calendar, Google Drive and Gmail all still take the same name, just to name a few. In fact, Page mentions that “we are not intending for [Alphabet] to be a big consumer brand with related products.” Brands will remain within the smaller companies.
On the business front, Alphabet, Inc. is now the publicly-traded entity in place of Google, Inc. The stock will still trade as GOOGL and GOOG on Nasdaq, however, and all Google shares are automatically converting over to Alphabet shares. When quarterly results come around, Page said Alphabet will segment reporting so Google’s financial earnings are separate from those of Alphabet.
The massive overhaul in structure seems mostly to act as a way to clean up the entire company’s focus. Google should no longer have to worry about spreading itself too thin with the new holding company Alphabet giving strength to its companies.