Google Reorganizes And Creates New Parent Company 'Alphabet'
August 11, 2015 at 4:30 AM (PT)
GOOGLE, founded as an Internet search company, has expanded into so many diverse areas -- including the music business -- that the company has decided to reorganize under a new name -- ALPHABET -- and separate its moneymaking businesses from its newer upstarts.
GOOGLE CEO LARRY PAGE took to the company blog YESTERDAY (8/10) in a post called, "G Is For GOOGLE," to explain, "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."
He continued, "What is ALPHABET? ALPHABET is mostly a collection of companies. The largest of which, of course, is GOOGLE. 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."
THE NEW YORK TIMES reports, "GOOGLE’s move is the most significant step by a SILICON VALLEY giant to get a handle on the sprawl of businesses that it has entered, an issue that increasingly afflicts other technology companies like FACEBOOK and AMAZON. While all of these tech companies began as entities focused on one main business, online bookselling or a social network, for example, many have diversified over the years into numerous side businesses including cloud computing, photo sharing and even satellites."
PAGE noted in his blog post that,"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."