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Google founders Larry Page and Sergey Brin have started a new “collection of companies” called Alphabet — and it includes Google. That’s right, now there’s a company bigger than Google.
The new holding company will include all of Google’s current properties, with the largest of course being Google itself. Sundar Pichai will become CEO, getting a promotion from his previous role as Senior Vice President.
Page is now CEO of Alphabet, while Brin is President. Alphabet comprises Google and other companies that have been housed under its primary-colored umbrella, including the X lab (which is building delivery drones), investment arms Ventures and Capital, and health-focused efforts Calico and Life Sciences.
page says “This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead.” The change should allow Alphabet to better manage and scale products in fields that aren’t directly related.
Alphabet is also replacing Google as a publicly traded entity. All Google shares will be automatically be converted into the same number of shares from Alphabet, with Google becoming a wholly-owned subsidiary of the new company. Both of its types of shares will continue to trade as GOOG and GOOGL on Nasdaq.
This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google. A key part of this is Sundar Pichai. Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I’ve been tremendously enjoying our work together.
Page and Brin hope that each Alphabet company will be able to run independently and develop strong individual brand identity.
YouTube, for instance, could in theory begin to shed some of its heavy Google association – dropping Google+ is a start – and become more of its own entity. Future acquisitions – looking at you, Twitter – could also continue to run largely on their own.
As for why the need for the name change: Google is simply too heavily associated with search.
As for the name, Page adds that language is at the core of Google search. Plus, “it means alpha‑bet (Alpha is investment return above benchmark).” Besides, Alphabet can be a great workout:
➤ G is for Google [Google Official Blog]