Google is now planning massive changes in its corporate structure. The company that is currently called Google is now going to be a subsidiary company of a new holding company called Alphabet. In simple words, Alphabet is a collection of companies that will operate under the supervision of CEO, Larry Page and President, Sergey Brin. These two are also the co-founders of Google. They introduce this idea of the Alphabet to independently run several businesses with better management. The Alphabet itself will not provide any consumer products or services itself, but it will be a holding company responsible for the management and administration of several organizations, the largest of which is Google.
Here are some important things that you need to know about this planned structural changeover from Google:
• Google itself was an initiative taken by the duo of Larry and Sergey. They admit that they believe in innovation with a touch of craziness for new products. Over the years since Google’s establishment, the company has introduced numerous smaller projects and joint companies in the market. These projects include self-driving cars, Life Sciences, and Calcico. The introduction of Alphabet will enable better service and focus on each and every one of these projects.
• The Google Corporation has restructured itself, not its service. This means that there won’t be any major changes to any of the Google products themselves. So if you use Google Search, Android, You Tube, Google Maps, and Google Apps, you won’t notice anything different.
• The Alphabet is a holding company (with GOOGL and GOOG as the stocks). The entire Google Corporation just renamed itself as ‘Alphabet’ under Larry and Sergey. Everything else remains the same, just with better management. The website for Alphabet is abc.xyz.
• Each Alphabet subsidiary (such as NEST, Calico, and Google itself) will have its own CEO, its own research and development, and its own funds. The Alphabet’s organizational structure is similar to Warren Buffett’s Berkshire Hathaway (BRKA). Each subsidiary company will be on its own except for services, management, and capital provided by the holding company Alphabet.
• Larry Page and Sergey Brin will take over as CEO and President of Alphabet respectively. This is the reason for the recent announcement of Sundar Pichai as CEO of Google. He’s a well liked executive who’ll now be taking care of Google while Page and Brin run Alphabet.
• With the help of the Alphabet, each business will now have independence and freedom under the supervision of well appointed CEOs to grow and prosper. This means that you’ll soon see massive developments in all of Google’s current projects.
• The main reason behind this move by Google is to appease investors. Over recent years, the shareholders had been worried about the innovative projects that Google had been investing in and whether they would be able to generate profit or not. 90% of Google’s sales come from the advertisement they carry out. Page and Brin had a number of projects and subsidiary companies to look after so they could not appease the shareholders. Now, Google is a separate subsidiary with a dedicated CEO that will work for the development of the company while Larry Page and Sergey Brin handle the capital and the management.