Google co-founder Larry Page said in a blog post that it had formed a new holding company called Alphabet (https://abc.xyz). Google would be a wholly owned subsidiary of that entity. Page will serve as CEO of Alphabet and Google co-founder Sergey Brin will serve as president, respectively, longtime Page lieutenant Sundar Pichai will take over as Google CEO.
“What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google,” Larry Page said. “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.”
Not every letter has a company. For Example, it looks like neither Google nor Alphabet own alphabet.com — BMW does. So without more confusion, here are the companies that make up Alphabet Inc. that will consist of the following entities:
- Calico (focused on longevity)
- Fiber (high speed internet)
- Google (search, ads, maps, apps, YouTube and Android)
- Google Ventures (VC investing)
- Google Capital (investment fund)
- Google X (auto-driving cars, Google Glass, internet by balloon, moonshots)
- Life Sciences (the glucose sensing contact lens people)
- Nest (smoke alarms, home camera, thermostats & connected home devices)
“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” Page says. “Alphabet is about businesses prospering through strong leaders and independence.”
Google will retain control of at least these business units such as search, ads, maps, apps, YouTube and Android and the related technical infrastructure. However, the life extension project Calico, “moonshot” projects such as the X Lab will operate as somewhat separate entities.
“In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation,” Page wrote.
According to Larry Page’s post, Alphabet will eventually report the earnings of Google separate from the other spinoff companies. According to Form 8-K here with the US Securities & Exchange Commission, Alphabet will be replacing Google as the publicly traded company on the Nasdaq stock exchange, and all shares of Google Inc. will convert to shares of Alphabet Inc. Company shares will continue to trade on the Nasdaq under the same GOOGL and GOOG ticker symbols.
Alphabet’s New Management
- CEO: Larry Page
- President: Sergey Brin
- Executive Chairman: Eric E. Schmidt
- CFO: Ruth Porat
- Senior Vice President, Corporate Development, Chief Legal Officer & Secretary: David C. Drummond
Google’s New CEO: Sundar Pichai
Pichai Sundararajan, better known as Sundar Pichai, was born in Tamil Nadu, India in 1972. His father Ragunatha Pichai was an electrical engineer for the British conglomerate GEC. He was fascinated by his father’s career and by gadgets in general. His family lived in a two room apartment. Though the Pichai didn’t have a room – he slept on the living room floor.
In 1984, Sundar Pichai got the first rotary phone. He need only dial a number once, and then it was registered in his brain. (According to Bloomberg Business week profile, Pichai can reel off statistics to his managers like crazy.)
High IQ was not only Pichai’s skill. He captained his high school’s cricket team, leading it to win regional competitions. Pichai graduated from Indian Institute of Technology Kharagpur (IIT KGP) in Metallurgical Engineering, and where teachers described him as “well-mannered” and “obedient.”
He finished top of his class at India’s prestigious IIT and got a full scholarship to Stanford, though the plane ticket to San Francisco cost more than his Dad’s annual salary.
He joined Google in 2004 after completing a masters in material sciences and engineering from Stanford, and an MBA from the Wharton School of the University of Pennsylvania. He was taking a bit of time along the way to work at Applied Materials and McKinsey.
Pichai argued forcefully for Chrome’s development, seeing concern ahead that Microsoft could modify Internet Explorer, the dominant search engine of the time, to make it more difficult for users to install the toolbar that made Google the default search engine.
The Chrome browser went into alpha over the objections of then-CEO Eric E. Schmidt, who thought it a pointless distraction. Chrome turned out to be a hit — it now runs the Internet on more than a third of all PCs, and is the most used browser in every country in the world except Germany, Japan, most of Africa, and, funnily enough, India.
Once Silicon Valley had been talking about the concept of dumb, cheap “netbooks” — laptops that stored everything in the cloud. However, Pichai realized it done. On 19 November 2009, Pichai gave a demonstration of Chrome OS and the Chromebook was released for trial and testing in 2011 and released in public in 2012. Today, Chromebooks make up nearly a quarter of all PC sales.
At the same time, Pichai was preparing the launch of Chrome OS. He was given an ever wider range of responsibilities, including the introduction of Google Drive and the management of Google Maps.
When Andy Rubin left Android to work on a secret robotics project, Page handed Android over to Pichai. Dealing with Rubin had been a master class in patience and diplomacy. Get the Chrome browser on Android phones and Pichai had to sign a term sheet with Rubin. It was a good thing Pichai had that experience.
How The Change Will Happen
Now, Google is still Google and owning everything. Next year or later this year, no specific date is set; Google holding company called Alphabet that will absorb all of Google’s stock. After that company will technically merge with Google then spit Google out as a subsidiary.
