Technology

Google restructures, names new CEO Sundar Pichai and Alphabet parent company

Big changes are coming from Google, both at the investor level and internally among Google’s rank and file. Larry Page and Sergey Brin, two of the original founders of Google, announced an expansive restructuring of Google and a new Parent Company called Alphabet.

Moving forward, Larry Page will now be the active CEO of Alphabet and Sundar Pichai will take over as CEO of Google. The new operating structure was announced by Larry Page today with a letter to investors. In the open-letter Page stated, ““Google is not a conventional company. We do not intend to become one.”

Page went on to say, “As part of that, we also said that you could expect us to make “smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.” From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have.”

The letter went on to say that Google, “did a lot of things that seemed crazy at the time,” but added that those “crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android.”

Page continued, “Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.”

In the new shakeup, Alphabet will be a “collection of companies” said Page. “The largest of which, of course, is Google,” he added. “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. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). 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,” stated Page. “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.”

As for the leadership structure Page explained adding Sundar as the new CEO by stating, “This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.”

“A key part of this is Sundar Pichai. Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I’ve been tremendously enjoying our work together. He has really stepped up since October of last year, when he took on product and engineering responsibility for our internet businesses. Sergey and I have been super excited about his progress and dedication to the company. And it is clear to us and our board that it is time for Sundar to be CEO of Google.”

Page added, “Google itself is also making all sorts of new products, and I know Sundar will always be focused on innovation—continuing to stretch boundaries. I know he deeply cares that we can continue to make big strides on our core mission to organize the world’s information. Recent launches like Google Photos and Google Now using machine learning are amazing progress. Google also has some services that are run with their own identity, like YouTube. Susan is doing a great job as CEO, running a strong brand and driving incredible growth.”

According to the announcement, “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, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG.”

Lastly, Page talked about the future of the company telling investors, “For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive for! I should add that we are not intending for this to be a big consumer brand with related products—the whole point is that Alphabet companies should have independence and develop their own brands.”