Today, a major restructuring reassigns Google as a wholly owned subsidiary of a new holding company called Alphabet. Larry Page and Sergey Brin, the duo that co-founded Google, will be leading the company that is a “collection of companies.”
The lines between Google and other subsidiaries will be clearer and allow each to run independently. While Google’s core businesses — search, advertising, Maps, YouTube, and Android — remain under usual control, Alphabet will be busy with other subsidiaries such as Nest, Fiber, Calico, Ventures, Capital, and the X lab. Since they will be operating independently, Alphabet is tasked with allocating capital to the subsidiaries.
Alphabet plans to continue Google’s model in having a CEO running each business. Sundar Pichai, Android and Chrome’s leader, is being elevated to CEO of Google and YouTube’s Susan Wojcicki will remain in her role. Omid Kordestani, Google’s Chief Business Officer, will shift into an advisory role with both Alphabet and Google.
Larry Page spoke on what Alphabet represents:
“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.”
All shares of Google will be converted automatically to the same number of shares of Alphabet.