There would rarely be a tech enthusiast who didn’t know about the founders of one of the world’s largest companies Google. From a search engine to begin with, the company went on to make several products, and even the biggest smartphone operating system, Android. Larry Page, the co-founder of Google was the CEO of Google and its products, while Sergey Brin, the other co-founder was the President of the company.
Now, the management gets shuffled, not largely but for someone who has been extensively working to make it better, it does. Sundar Pichai, the Senior Vice President of products (Android, Chrome and Apps) at Google is now the CEO of Google. Reason? Larry and Sergey have made a new company, Alphabet Inc., and Google will be one of the companies being run by the new entity.
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.
Page described it in the easiest way, that Alphabet will be the parent company that runs several companies under it, and one of them will be Google.
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.
While heaping praises on Sundar Pichai, Page said that he has been picking up since he was made the Sr. Vice President of the important products at Google.
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.
Now that you’ve learned where Google and its heads are moving forward to, let us see what happens to everything around it.
What does this mean for businesses?
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. The two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG.
What is still a part of Google?
Though Google entirely becomes a part of Alphabet Inc., for Sundar Pichai and the teams under him, there are sub-divisions that remain Google’s to work on.
Google Search, Android, YouTube, Apps, Google Maps and the Ads network will remain a part of Google. With this, it means that the teams that are working in Google, will be taking care of these products.
A bigger question, what will Alphabet Inc. run?
Here’s a list of what all Alphabet will run, if you were in an impression that Alphabet is a parent company only for Google.
- Google (and its products as listed above)
- Google Ventures
- Google Capital
- Google Fiber
- Nest (the home automation and IoT company)
- Google X (having projects like Glass, Auto, Internet by Balloon)
- Calico (for longevity)
- Life Sciences
Some things are unclear, but as Google’s list of products have been given already, we expect Project Fi and other such products to go under Alphabet.
Who’s in management at Google?
- Sundar Pichai becomes the new CEO of Google Inc.
- Ruth Porat will remain the CFO at Google
- Omid Kordestani, the Chief Business Officer at Google will leave the position, and will become an advisor for both, Alphabet and Google
Who’s in management of Alphabet?
- Larry Page is the CEO
- Sergey Brin is the President
- Eric E. Schmidt is the executive chairman
- Ruth Porat will be the CFO even at Alphabet
- David C. Drummond takes up the role as Senior Vice President, Corporate Development, Chief Legal Officer & Secretary
What other changes can happen?
Though nothing is said as yet, we expect Susan Wojcicki to still be the CEO at Youtube, Tony Fadell who founded Nest, could get the title of CEO, and Arthur Levinson, who was formerly the CEO of Genentech and is now a part of Calico, can become the CEO of it.
Is the transition already done?
No, later this year, Google’s heads will create Alphabet. Alphabet will then technically merge with Google, so as to replace the core team, and then Alphabet will run Google as one of the companies held and funded by a parent company.
So currently, we just know about the plans and how things are going to roll out. But “when”, even we do not know.
Was this move expected?
Whenever a huge shakeup happens in companies, there are several theories running around it. While thinking about Alphabet Inc., Larry Page and Sergey Brin could have had Sundar Pichai as the major reason to worry. One of the theories say that Twitter might be pitching to have Sundar as its CEO, and Google cannot afford to lose such a person who has been the best at what he is doing currently.
Business Insider reports that a person close to Twitter said that he wouldn’t be surprised if the board might have made an offer to Sundar Pichai. They did that three years ago, but Google didn’t let him go (of course by offering a better package), but now the huge role as the CEO of Google would keep him here, and ensure he doesn’t think of changing his job.
No one except Google and its executive team might have known and expected such a move. But, if the Twitter CEO theory isn’t right, then Page and Brin were looking for a better management to take care of things, as things aren’t limited to Google for them.
Alphabet Inc.’s website: abc.xyz
Announcement: Link 1 | Link 2
