Google’s Alphabet: What Does it Mean?

Google announced a new corporate operating structure, creating a new company, Alphabet, that will count the Internet giant as a subsidiary. Sundar Pichai, currently a senior vice president in charge of Internet businesses, will become CEO of Google. Current chief executive Larry Page will take the same post at Alphabet and run the company with co-founder Sergey Brin.

Alphabet will contain businesses “far afield” from the company’s core Internet products—including Google X, Fiber and Life Sciences, Page said. Google in recent years has funneled money into projects such as drone delivery, self-driving cars and health systems.

What is Alphabet?

In the words of Google’s CEO Larry page, who will become Alphabet’s CEO, “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. “

Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG.

 

Source: Google, Inc.