The Google founders have just created a new company which they call Alphabet. This was announced yesterday by Larry Page who is a co-founder of Google as you know it. In one word, Alphabet is an umbrella company that will be run by Larry Page as CEO and Sergey Brin as President. This umbrella company will manage Google as well as other products. In other words, the Google you know has just been slimmed down.
“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.”
Part of the statement read that Alphabet Inc will now replace Google Inc on the stock exchange.
Google as a company had gone beyond its initial scope of business of search. Google’s Android together with Apple’s iOS controlled 96% of the total mobile operating system market in the last quarter of 2014. Google has drone and life science programs. It only makes sense for them to do this for better management. As seen in the diagram by CNBC above, most of the core internet remains with Google under a new CEO while other services will be under the direct control of Alphabet and ultimately, other units will now have “strong” CEOs.