ABCs Of Restructuring, Page And Brin Head-Up ‘Alphabet’ Parent Company, Pichai Now Google CEO

Most people already recognize Google as a verb, and now it's officially part of Alphabet. Yes, that's Alphabet with a capital "A," which is a newly formed entity that its CEO Larry Page describes as "mostly a collection of companies." That includes Google, Alphabet's largest building block, along with "companies that are pretty far afield" of Google's Internet products.

"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)," Page explains. "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."


Each business within Alphabet will have its own "strong" CEO. Page and Google's other co-founder, Sergey Brin, will run Alphabet and step in as needed, so while each company will be its own thing, they're all have the support of what used to be Google and is now Alphabet. Page and Brin will determine who gets to run each company, along with their salary, and will implement segment reporting for its Q4 results -- Google's financials will be provided separately.

The creation of Alphabet is a recognition by Google's founders that what started off as a search company has since branched off in many different directions. Through its own innovations and by way of acquisitions, Google is a player in broadband Internet service, mobile software development (Android), the fast growing Internet of Things (IoT) sector (Nest), self-driving cars, and several more areas.

This may have been an inevitable move, but not until Page and Brin could figure out the logistics. What they've decided on is to oversee the new holding company themselves, while putting trust in Sundar Pichai, previously the senior vice president in charge of products, to take charge of what will be a slimmer, more nimble Google.

Sundar Pichai
With Larry Page and Sergey Brin leading up Alphabet, Sundar Pichai has been promoted to CEO of Google

"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," Page added. "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."

With Google in good hands, Page and Brin can make gambles on other companies and areas that they're developing without annoying investors, some of which have been critical of Google's fascination with technologies outside search and advertising.

You'll find Alphabet at Turns out that BMW owns, though it will be interesting to see if that domain changes hands.