Everyone knows Google as one of the biggest tech companies in the world, but a recent reorganization is pointing to signs that Google wants to be known as more than a tech company. The intention, of course, was always there. “Google is not a conventional company. We do not intend to become one,” said co-founder Larry Page in his 2004 initial public offering (IPO) letter. In his latest blog post, Page announced the creation of a new company, Alphabet. Page will continue on as CEO of Alphabet, and co-founder Sergey Brin was announced as President of the new company.
“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant,” Page continued. While the usual Google products and services will still remain under Google, Alphabet is a collection of companies in fields that Google wants to break into.
One of the fields Google is breaking into is the healthcare industry. Life Sciences is developing a wearable—a contact lens that can sense glucose levels, and Calico, which is a research and development company looking into tech that will understand the biology of aging. Google is also putting their X lab under Alphabet. It is rumored that their self-driving car experiment will be under Alphabet, but Page also announced the development of Wing, an effort for Google to break into the drone delivery space. Another interesting move under Alphabet is their development of their investment businesses, Ventures and Capital.
Replacing Page as CEO of Google is longtime Google employee Sundar Pichai, who oversaw product management at the company. Pichai oversaw the development of many Google products such as Google Chrome, Chrome OS, Google Drive, Gmail, Google Maps, the Chromebook, and Android. “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,” Page said. “It is clear to us and our board that it is time for Sundar to be CEO of Google.”
Alphabet will also be replacing Google Inc. as the publicly-traded entity, with all shares of Google converting into the same number of shares of Alphabet with all the same rights, with Google becoming a wholly-owned subsidiary of Alphabet. According to Page, the shares will still be listed as GOOGL and GOOG on NASDAQ.
“For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for,” Page said. However, Page stressed that Alphabet is not intended to be a big consumer brand with related products, but that each company under Alphabet should be independent and develop their own brands.
“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,” Page said. Alphabet is proof that Google wants to be more than just a tech company, and this could benefit everyone involved on both the consumer and business side of the project.