Easy as ABC: Google gets new CEO with formation of Alphabet parent company
“[This] is a very exciting new chapter in the life of Google – the birth of Alphabet,” Larry Page, co-founder and chief executive of Google, wrote in a blog post on Monday.
“We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s important innovations, and is the core of how we index with Google search.”
Page will become the CEO of Alphabet and Google’s co-founder Sergey Brin will become Alphabet’s president. Eric Schmidt will be the executive chairman at Alphabet, and Sundar Pichai is taking over as Google’s CEO.
“Our company is operating well today, but we think we can make it cleaner and more accountable,” said a statement from Page, who co-founded the tech giant 17 years ago with Brin.
Alphabet will replace Google as the publicly traded company on the stock market, with all Google shares becoming Alphabet shares, and Google becoming a wholly-owned subsidiary of Alphabet.
Google will continue to retain its core search and advertising business, as well as its maps division, YouTube and Android, according to an SEC filing. Most of the other ventures will be run separately under the Alphabet umbrella.
The restructuring comes as Google has broadened into other development areas such as drones, pharmaceuticals, self-driving cars, and venture capital, “none of which make much money and which had spooked Wall Street investors,” according to the New York Times.
Under the new structure, analyst Trip Chowdhry told AFP, a French news outlet, that “an investor will be able to see how the core business is performing, what kind of margins they are getting,” and “also keep an eye on…new innovations.”
The move was made in order to “keep tremendous focus on the extraordinary opportunities” currently being explored within Google, Page said in his blog post.
The reorganization also comes at a time when Google is facing regulatory and legal issues, such as an antitrust battle in Europe.
After the announcement, Google’s share price jumped six percent to $672 in afterhours trading, adding tens of billions of dollars to the company’s value.