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Google restructures, becomes subsidiary of Alphabet holding company
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Aug 10, 2015, 06:09 PM
Google has announced a major restructuring of its business, starting with it being under the control of a new holding company called Alphabet. In a letter to shareholders, also posted to the Google Blog and on the new organization's website, Google founder Larry Page writes that the change is being made in order to make the company "cleaner and more accountable" as a "collection of companies" headed up by Google itself.

The letter starts off by referring to the original founders letter written 11 years ago, the quote "Google is not a conventional company. We do not intend to become one," and that it would be expected Google would make "smaller bets in areas that might seem very speculative or even strange when compared to our current business."

"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," writes Page. These "far afield" companies include those in life sciences, the longevity-focused Calico, and self-driving cars. "Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related."

As part of the change, Larry Page will become CEO of Alphabet itself, with Sergey Brin serving as President. The new Google will be headed up by Sundar Pichai, taking the role of CEO, with Page writing that both he and Sergei "have been super excited about his progress and dedication to the company." Elements of the X lab, Google's experimental arm, will have major segments split off under Alphabet, including its Wing drone delivery research.

For investors, Alphabet Inc. will replace Google Inc. as the publicly-traded company, with Google shares automatically converting to an identical number of Alphabet shares, with similar rights. Google will become a wholly-owned subsidiary of Alphabet, with the two classes of shares continuing to trade on Nasdaq under GOOGL and GOOG.

Ultimately, Page is not intending for Alphabet to be a public-focused company, as that role will be filled by companies it controls. "The whole point is that Alphabet companies should have independence and develop their own brand," states Page.
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Aug 10, 2015, 06:30 PM
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Aug 10, 2015, 06:36 PM
At first I thought this was a joke. Like an Onion article. Crazy. It does make sense. Google has for a long time been branching out into divisions that don't make sense for a search site. It sounds though as if Alphabet won't include Android as a separate company given Sundar is the head of it. So that'll mean that Nest + Dropcam will be their own entity, X Labs will be it's own, Project Lunar will be it's own, Cars will be it's own thing, and then Search, Gmail, Chrome, Google +, YouTube, Music, and Android will all be one?

If they're smart I could see YouTube branching off as it's own. This would have made a lot more sense when Google owned Motorola. Though I still wouldn't be surprised if we see Google get into the Android hardware business.
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Aug 11, 2015, 08:45 AM
"The core of Google will be search advertising. The core of Alphabet will be a blazing furnace to shovel hundred dollar bills into."— Downtown Josh Brown
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