Recently, Google made a big announcement about the change in its corporate structure. Essentially, Google is now changing into Alphabet, or more specifically, Google will now be part of Alphabet. What’s with the sudden decision for this corporate change you ask? Well, this entails several different things, the most important of which we are about to discuss.
Ever since its founding and establishment in 1998, Google has now grown widely as a company, stretching out into different frontiers and corners of the IT and consumer tech industry. This means that several other companies, subsidiaries, and projects now comprise Google, and it is exactly this growth that led to the decision to found Alphabet. Google will no longer represent the entirety of its corporate structure, but it will instead simply represent the bulk of its Internet services. All other subsidiaries and projects will be separated into the new corporate entity known as Alphabet.
In other words, primary services such as Google Maps, Youtube, and Android will still be under the Google company name, which would then be under Alphabet’s management. Other relatively distant projects, such as the Google Ventures and the Google X programs, will be under another separate management within the holding company. All previous shareholders, directors, and executives of their separate projects and subsidiaries will remain the same. This also means that Alphabet itself will remain under the same executive management team. Larry Page will be the CEO of Alphabet, with Google co-founder Sergey Brin as its president. Google itself (as the new service) will now be under Sundar Pichai, who will be handling its major operations as its new CEO.
According to major reports, the decision to reorganize the company under a new name was made fundamentally to allow better management of each separate business. By separating core services with other businesses and projects, independent management is expected to improve and would overall enhance the stability of the entire holding company.
Despite being widely known as a big and bold announcement, the reorganization of Google’s corporate structure is considered as more or less an eventuality. Google X “moonshot” projects, for example, usually present a radical, new, or breakthrough concept that a project would not consider as standard within the company. The need to classify these projects as a separate venture can be easily explained this way, most likely giving birth to the nucleus that eventually presented itself as Alphabet.
Following this announcement, Alphabet will initially be a direct, wholly owned subsidiary of Google. It would then eventually move forward to establish the Alphabet Merger, which would then merge with Google to make it its direct, wholly owned subsidiary. By this point, the new company will have replaced Google as the new publicly traded company on the Nasdaq stock exchange, converting all shares of the company to Alphabet.
If you want to see more about what Alphabet is all about, head on over to abc.xyz to learn more.