Google announced today a massive restructuring that puts itself under a new parent company called Alphabet.
The search giant’s CEO, Larry Page, announced today that it will be creating a new company, called Alphabet, to oversee a group of smaller subsidiaries, one of which will be Google. Page and his co-founder, Seregy Brin will be stepping up to command the new company.
Google, meanwhile will be getting slimmed down and receiving a new CEO. Sundar Pichai, Page’s most trusted lieutenant, will be assuming that position.
“Sergey and I are seriously in the business of starting new things,” Page wrote in a blog post. “In the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.
“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.”
Google is a company that has been growing massively overtime to encompass a huge number of products beyond its original search engine. Even though its search and advertising business is making more than $50 billion a year, Page has to look forward to where revenue can come from in the future. This has lead to Google’s interest in wearables, smartphones, and even driverless cars.
This all makes for a huge, somewhat unwieldy, company. This reorganization will change that, giving the company(s) more room to grow, and more independence from each other as well.
In addition to Google and several other subsidiaries, Page mentioned specifically that Alphabet will oversee Google X, the company’s “do crazy stuff” research arm; Calico, the company’s project to increase the human lifespan; and Life Sciences, which focuses on projects like the smart contacts for diabetes patients. Android and YouTube, interestingly, will remain part of Google.
Pichai has been gradually taking on more responsibilities at Google over the past few years, and the step up to CEO is the next step. Back in October, Page announced that he would be focusing on Google’s future, which is when he handed many products’ management over to Pichai.
Page wrote that he “feel[s] 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.”
Page said he and Brin chose the name Alphabet “because it means a collection of letters that represent language, one of humanity’s most important innovations.”