In a surprise announcement today, Google unveiled a new Company called as ‘Alphabet’ https://abc.xyz. It is a new Parent/Holding company that will separate the highly profitable search and advertising business ‘Google’ from other moonshots business such as self-driving cars, building robots, curing diseases, etc. The new Alphabet will be now headed by Larry Page as CEO and Google co-founder Sergey Brin as President.
Now the question is, who will head Google if the CEO Larry Page is moving to Alphabet. Well, it is the Sundar Pichai who was the head of Android and Chrome so far. Now onwards, Sundar Pichai is the new CEO of Google.
Alphabet is just a collection of group of companies. However, the ‘Slimmed down’ Google will be largest subsidiary of this parent company. In the Blog Post, Larry Page described Alphabet as “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.”
If we try to simple it down more, Google will still run Search, Advertising, Maps, Apps, YouTube and Android led by Sundar Pichai. While other services and companies such as Calico (life-extension biotech research), Nest (maker of the Nest Thermostat and other smart home products), Fiber (high-speed Internet service), Ventures and Capital and X lab (“moonshot” research projects such as self-driving cars and delivery drones) will be handled by the new Alphabet Company led by Larry Page.
Here is how Larry Page described ‘Alphabet’ in his latest Blog Post:
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.
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. 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. In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole.
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. I feel 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. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that. 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.