Google Shares New Operating Structure: The birth of Alphabet Inc.
Alphabet Inc- Reorganizing Google/ Image Source: Alphabet Inc
Google has been operating well with a diverse portfolio. Google team has this firm belief that they can make Google to do more important and meaningful things. Sergey and Larry wrote in the founders’ letter “Google is not a conventional company. We do not intend to become one”. To make even better, they have created a new company called Alphabet. Larry Page will be the CEO for Alphabet and Sergey as the Persident
Larry Page, CEO, Alphabet wrote “We did a lot of things that seemed crazy at the time. Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super excited about”.
What is Alphabet?
Alphabet will be a collection of companies, the largest in the pool being Google. This has been done to be able to allow them more management scale such that they can run things independently which are not very related. The example goes to Calico (focused on longevity) and Life Sciences (glucose-sensing contact lens). Larry Page, further writes “Alphabet is about businesses prospering through strong leaders and independence”. Each business will have a strong CEO to run them. Larry and Sergey will be in service to the CEO’s as needed while handling capital allocation, and making sure each business is executing well. They intend to provide Google financials separately from the other Alphabet’s businesses in the form of segment reporting. Since Larry and Sergey would be looking more at Alphabet, Sundar Pichai has been named the CEO of the slimmed down Google. Larry writes about Sundar “I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that”.
G is for Google/ Image Source: Alphabet Inc
X lab will also be a part of Alphabet which is an incubator for efforts including Wing, the drone delivery. Google Inc. will be replaced by Alphabet Inc. in the publicly-traded entity and all the current shares will be converted automatically to the same number of shares of Alphabet, with same rights. Google will become a wholly-owned subsidiary of Alphabet. However, there will be two classes of shares will be traded on Nasdaq, being the GOOGL and GOOG.
“We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive form,” Larry further wrote. They do wish to getting more ambitious things done, empowering great entrepreneurs and companies to flourish, improving Google through greater focus and most importantly improving the lives of people. It is really interesting to see the search engine which everyone was using undergoing such changes to make things better.
Originally published at www.marminova.com on August 14, 2015.