Google to Be Part of New Holding Company Called Alphabet
Sundar Pichai has been named CEO of Google with co-founders Larry Page and Sergey Brin transitioning into new roles at Alphabet.
Google is reorganizing to split up its core businesses such as search and YouTube from its long-term investments such as Google Ventures.
The company announced Monday that it will form a holding company called Alphabet that will own Google Inc. and also a group of subsidiaries that co-founder Larry Page described as "pretty far afield of our main Internet products," including the moonshot lab Google X.
Page will become CEO of Alphabet with fellow co-founder Sergey Brin assuming the role of president. They have appointed longtime employee and senior vice president of product Sundar Pichai as CEO of Google, which will oversee a slimmed down product slate including search, ads, maps, apps, YouTube and Android.
"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related," Page wrote in a blog post. "Alphabet is about businesses prospering through strong leaders and independence."
The reorganization allows Page and Brin to take a step back from day-to-day operations at Google's core businesses and focus attention on its more ambitious ventures, as Alphabet becomes the holding company for biotech company Calico, home automation technology firm Nest, Internet provider Fiber, Google X, and investment arms Google Ventures and Google Capital.
"For Sergey and me this is a very exciting new chapter in the life of Google — the birth of Alphabet," Page wrote, adding, "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."
When the reorg takes effect later this year, Alphabet Inc. will replace Google Inc. as a publicly traded company, and all Google shares will automatically convert into the same number of Alphabet shares. The company will continue to trade on the Nasdaq as GOOGL and GOOG.
The company's shares were trading up more than 5 percent during after-hours trading.