CEO Larry Page announced via Blogspot on Monday the creation of a new public holding company, Alphabet Inc., to replace Google Inc. in an attempt to make operations “cleaner and more accountable.”
“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes,” Page writes in his post. “But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.”
According to Page, Alphabet will be a collection of companies, one of which will still be named Google, albeit a more “slimmed down” version.
According to a filing with the U.S. Securities and Exchange Commission (SEC) from Google Inc., the Google business will include the search engine, ads, maps, apps, YouTube and Android, among other related technical infrastructure.
“The companies that are pretty far afield of our main Internet products (will be) contained in Alphabet instead,” Page writes. “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.”
Other subsidiaries of Alphabet include the X lab, which includes projects like Wing, focused on drone delivery. Further, Ventures and Capital, Google Inc.’s investment arms, are planned for growth. These areas will be run separately from the Google business, according to the U.S. SEC filing.
After completion of the Alphabet merger, Page will become Alphabet’s CEO, and Sergey Brin, who cofounded Google with Page, will become president of Alphabet. Sundar Pichai, who is currently the senior vice president of products at Google, will become the new CEO of Google Inc.
“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 we index the Google search,” writes Page.
Page writes all shares of Google will automatically convert to the same number of shares of Alphabet. The two classes of shares will continue to trade on the Nasdaq as GOOGL and GOOG.
The merger is expected to start later this year.
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