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Back to School – What is Alphabet?

And wow… Google made an arrangement with Alphabet, Inc. replacing Google as the publicly-traded company and thus changing its operating structure.

Larry Page said in blog post he would become the chief executive of Alphabet Inc, while Senior Vice President Sundar Pichai will be CEO of Google.

“This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google,” Larry Page

But, 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 is about businesses prospering through strong leaders and independence.

In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation. In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole.

 

 

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