Google’s Larry Page announced very recently that the company underwent major structural and hierarchical changes. The biggest, most important aspect is that Google is now owned by a brand new company: Alphabet.
So what does this mean for the entire company? Is Google shrinking or under totally new management? Are Google services becoming Alphabet services? Don’t worry, it’s actually a lot simpler than you probably think. We’re going to break it down for you.
Google is Now a Subsidiary to Alphabet
Google, as giant as it is, is now only a subsidiary. This means it operates under Alphabet.
Alphabet, on the other hand, is a holding company. Co-founder and former CEO of Google Larry Page wrote that Alphabet’s main purpose as a company is to basically just oversee all of the smaller companies it owns, the largest of which is obviously Google.
Larry Page is now the CEO of Alphabet, the parent company. He will join the reigns with other co-founder of Google, Sergey Brin, who is now the President of Alphabet. Sundar Pichai is taking over as the CEO of Google, but will presumably report to Page and Brin once the restructuring process finishes.
Certain Google Projects are Now Alphabet Projects
Your familiar Google services are staying under Google and with the Google brand, so nothing is changing in that regard. In fact, if you’re a consumer, pretty much nothing significant is changing for you. However, if you’re more of a technology enthusiast, there are a few differences you should know about.
Google is shrinking a bit with the restructuring because some projects that were initially on Google’s watch are now being assigned to the top-tier Alphabet team. Page said that the “companies that are pretty far afield of our main internet products” will see Alphabet take them on. These include Calico, Life Sciences and Google X, which focus on longevity, health technology and general major technological advances (like the self-driving car) respectively.
Your familiar Gmail, Google Drive and of course Google search aren’t changing or getting new names.
Tip: If you were looking for the hidden link some people were talking about on Larry Page’s announcement post, it’s been removed. Don’t worry though, Guiding Tech has you covered. A single period following “drone delivery effort” originally linked to this gag website by HBO.
Investors, Everything is Under Control
If you’re an investor, fear not. All of your Google shares will automatically transfer over to Alphabet shares, since the publicly-traded entity is now Alphabet, Inc. For whatever reason, the stock names will still trade as GOOG and GOOGL on Nasdaq.
Page also stated that come time for the quarterly earnings report, Alphabet will segment the earnings for Google, rather than collectively report on Alphabet. Doing that would throw-off quarterly and annual comparisons.
A, B, C
All in all, Alphabet is a way for Google to refocus all of its efforts and organize all of its projects. Internet products and services will stay within Google, while other companies and less relevant projects get Alphabet’s supervision. It’s a holding company, not a new brand.