Google co-founder has announced the new operating structure of the company on the official Google blog. Larry Page told that they are creating a new holding company named – Alphabet Inc. Google search and all other business will be the subsidiary entities under the head of Alphabet. Larry Page is going to be the CEO of Alphabet and Google co-founder Sergey Brin will be the President of Alphabet. Sundar Pichai, formerly senior vice president of Android, Chrome and Apps at Google will replace Larry Page as a new CEO of Google.
Larry Page wrote on the official Google Blog that the company is doing well and they are focusing more on the extraordinary opportunities inside the Google. “Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet (http://abc.xyz)
I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.” Said Larry Page.
He has also explained what is Alphabet and how new structure will work. “Alphabet is mostly a collection of companies. The largest of which, of course, is Google. 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. Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence.”
Calico (Focused on longevity), Fiber (Internet Access), Google, Google Ventures (VC investing), Google Capital (investment fund), Google X, Life Science (the glucose sensing contact lens) and Nest are going to be the different entities under the belt of Alphabet. Whole Google Inc. is going to be the supplementary individual that will include products like Google Search, Maps, YouTube, Android, Ads and Apps. Though YouTube has its own CEO it will work under Google. Google X will include products like Google Glass, Auto driving cars, moonshots and Internet by balloon. Smoke alarms, home camera, thermostats & connected home devices are going to be the part of Nest.
According to the company, the new structure is designed to provide the best opportunities to each business to stretch the boundaries under the leadership of new strong CEOs. Sundar Pichai is going to play a key role in this structural transformation as a CEO of Google (the biggest entity of Alphabet). It looks like Page and Brin are looking to eliminate themselves from the daily Google operations and focus on the wide range of projects on a higher level.
This change won’t happen immediately. Google is still Google (having all products under its belt). Google Inc. will create a holding company Alphabet Inc. sometime later this year (No specific date announced yet). And all shares of Google will be automatically converted into the same number of shares of Alphabet with the same rights. Then Alphabet will spit Google as the subsidiary entity.
Larry Page is very excited about Alphabet; as it will let company to take a long-term view, empower great entrepreneurs to flourish and get more ambitious things done. It will be interesting to see how other Google executives handle this transition and how it will affect Google Inc. as a company.