Google announces major restructure with new parent company Alphabet, and new CEO
Google has revealed a major restructure with the formation of a new parent company Alphabet that will see co-founders Larry Page and Sergey Brin serve as chief executive and president respectively, along with the appointment of Sundar Pichai as chief executive the core Google business.
The shock announcement, made in a blog post penned by Page, describes Alphabet as “mostly a collection of companies”, with the “newer Google” described as “a bit slimmed down”, while the companies that are “pretty far afield of our main internet products” contained in the wider Alphabet grouping.
Page claimed the restructure will allow Google to remain focused on its core business of online companies with Pichai at the helm, while allowing it to also develop new arms of the business, such as its Life Sciences pursuits.
The new structure means Google will implement segment reporting for its Q4 results, with Google’s financials reported separately to those of the rest of Alphabet businesses.
“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. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed,” explained Page.
Under the reorganisation, Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet.
Google’s new chief executive Pichai was appointed to oversee the company’s major products, such as its advertising offerings, search, maps as well as Google+, last October, having previously led its Chrome browser, and Android divisions, with industry observers describing him as the outfit’s ‘rising star’.
Page added: “I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that.”