One of tech’s biggest names, Google, is reorganizing under a new moniker – “Alphabet” – in a move underscoring its founders’ ambitions to pursue ventures far beyond the company’s Internet search core, from self-driving cars to cutting-edge medical research.
Mr Page and Sergey Brin, who co-founded Google two decades ago while at university, will be chief executive and president of Alphabet respectively.
BMW owns both the Internet domain Alphabet.com (which may explain why the domain for the new company is, instead, abc.xyz) as well as the trademark Alphabet, which is now the name of a BMW subsidiary that provides services to corporations with vehicle fleets.
With Page now heading up Alphabet, SundarPichai, a long-time Google executive who most recently served as the company’s senior vice president of products, will head Google.
All Google shares and rights will be converted to Alphabet but will remain as GOOGL and GOOG on Nasdaq.
The company’s mysterious X lab, responsible for developing initiatives such as drone delivery business Project Wing, will now operate under Alphabet, as will its Life Sciences division, which is developing a glucose-sensing contact lens. It represents language, “the core of how we index with Google search”, and because Alpha-bet means “investment return above benchmark, which we strive to do”.
Google’s reason behind the restructuring is that the company had become too diverse, and for the individual business to flourish successfully it would be better to split them up under a new parent company. Google China moved its servers from mainland China to Hong Kong in 2010 when the company refused to comply with search censorship.
Do you think the new name “Alphabet” is a bit jarring, considering you’re so used to talking and typing out “Google” every single day? Google Ventures and Capital will also become part of the new structure, according to Page. Page is to become CEO of Alphabet.
“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related”, he said. Google still exists as a company but will now be part of a larger entity with broader ventures than search and advertising.
The announcement on Monday of the new corporate structure was generally welcomed in Silicon Valley and on Wall Street, where Google shares shot up some 3.6 percent in early trade on the news.
The radical organizational shift is something similar to the way companies like General Electric are organized, with a command center of sorts that’ll act as the Central Processing Unit to oversee and manage activities such as finance and other independent business activities.