Meet Alphabet, The New Conglomerate Absorbing Google That’s Run By Larry Page & Sergey Brin

As subsidiary, Google retains divisions of search, ads, Android, YouTube, apps and more. It also gains a new CEO, Sundar Pichai.

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Google’s being acquired. Its new owner will be Alphabet, a palace coup pulled off by Google cofounders Larry Page and Sergey Brin. Page is to become CEO of the new Alphabet, Brin his president and Sundar Pichai, formally senior vice president of Android, Chrome and Apps at Google, takes over as Google CEO.

Page shared the news today both on the Google blog and on the new Alphabet site. He wrote:

Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.

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.

Alphabet will be replacing Google as the traded entity, with all shares of Google converting to Alphabet stock. It will still be known as GOOG and GOOGL, however. The company has also filed a Form 8-K here with the US Securities & Exchange Commission, outlining its plans.

YouTube, Android, Ads & More Remain Part Of Google

From the filing, Google will retain control of at least these business units:

  • Search
  • Ads
  • Maps
  • Apps
  • YouTube
  • Android

It will also keep control of unspecified technical infrastructure.

What’s Part Of Alphabet?

What makes up the alphabet of the new Alphabet? From the filing and blog post, Alphabet includes

  1. Calico (the folks who want you to live forever)
  2. Fiber (high speed internet)
  3. Google (Search, Maps, YouTube, Android, Ads, Apps)
  4. Google Ventures (venture capital business)
  5. Google Capital (investment fund)
  6. Google X (auto-driving cars, Google Glass, internet by balloon, moonshots)
  7. Life Sciences (the glucose-sensing contact lens people)
  8. Nest (smoke alarms, home cameras, thermostats & connected home devices)

It’s unclear where many other things will go. Project Fi, Google’s virtual mobile network, for example. Will that stay part of Google or roll under Alphabet? That’s not been made clear.

Perhaps the biggest surprise is that YouTube — which has its own CEO in the form of long-time Googler Susan Wojcicki — hasn’t been rolled out from under Google.

It might be that after the initial transition, this and other spin-outs could happen.

Alphabet’s New Management

Alphabet’s new management structure is effectively hijacking all of Google’s old management structure and will be like this:

  • CEO: Larry Page
  • President: Sergey Brin
  • Executive Chairman: Eric E. Schmidt
  • CFO: Ruth Porat
  • Senior Vice President, Corporate Development, Chief Legal Officer & Secretary: David C. Drummond

Google’s New CEO: Sundar Pichai

Over at Google, the big management change is Pichai taking over as CEO. He’ll be only the third person to ever occupy that role at Google. Page was the first CEO, then Schmidt, then Page returned to it. Pichai has been widely praised as a sensible, no-nonsense executive who gets stuff done.

Aside from Pichai, Porat will remain CFO at Google in addition to her new role in that job at Alphabet. Other changes haven’t been announced.

Google’s chief business officer Omid Kordestani will be leaving that position and taking up a new post as advisor to both Alphabet and Google.

How The Change Will Happen

Right now, Google is still Google, owning everything. Later this year — no specific date is set — Google will create a holding company called Alphabet that will absorb all of Google’s stock. Then that company will technically merge with Google, then spit Google out as a subsidiary.

Hooli & More

Back to the Alphabet post, an Easter Egg is apparently buried within it. Spotted and tweeted by Jack Clark, among others, there’s a hidden link to the Hooli web site, that fictional giant conglomerate of HBO’s Silicon Valley:

That link potentially could cause Alphabet to wind up penalized in Google, by the way. It’s unlikely but possible, as our post on Search Engine Land explains.

Meanwhile, the Alphabet.com website — owned apparently by BMW and not related to Google, which is at abc.xyz — has been overwhelmed by people going to the wrong place:

If you’re looking for more coverage, you won’t go wrong with the gazillion tech publications also covering the news, as aggregated here on Techmeme.

Also see our related coverage:

And from my youth, here’s Big Bird trying to figure out what Alphabet means:


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About the author

Danny Sullivan
Contributor
Danny Sullivan was a journalist and analyst who covered the digital and search marketing space from 1996 through 2017. He was also a cofounder of Third Door Media, which publishes Search Engine Land, MarTech, and produces the SMX: Search Marketing Expo and MarTech events. He retired from journalism and Third Door Media in June 2017. You can learn more about him on his personal site & blog He can also be found on Facebook and Twitter.

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