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| photocredit: google.com |
Google Inc, the $US445 billion search
advertising giant, shocked the corporate world this morning when
it announced a sweeping overhaul of its business and a (rather nauseating)
re-brand of its corporate entity.
On the stock exchange, what was once Google will
henceforth be known as Alphabet. Google, the thing you use to search for stuff,
will be still be known as Google, but is now just one of Alphabet's many
businesses.
The company will continue to operate as Google in
most of the important ways, including the search engine that made it one of the
world's biggest companies. But it will operate a holding company named
'Alphabet', announced after stock markets closed.
Alphabet will include not just Google but the company's
huge array of other operations. That includes it's life sciences operations,
for instance, which is working on a special smart contact lens.
Splitting the company up and rearranging it under a
new name will allow each of those different businesses to be run by different
bosses, the company said. It will also allow it to report each of those
businesses' results separately.
The company also said that its re-organisation would
help it concentrate on its more speculative, experimental work.
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| photocredit: google.com |
"Alphabet will also include our X lab, which
incubates new efforts like Wing, our drone delivery effort," the company
wrote in its announcement. "We are also stoked about growing our
investment arms, Ventures and Capital, as part of this new structure."
Sundar Pichai, who before ran most of Google's most
important products, will become its CEO. (Pichai had been rumoured to be in the
running for the vacant position of Twitter CEO.)
Larry Page wrote in a blog post that the company has
"long believed that over time companies tend to get comfortable doing the
same thing, just making incremental changes.
"But in the technology industry, where
revolutionary ideas drive the next big growth areas, you need to be a bit
uncomfortable to stay relevant."
Referencing Google's 2004 commitment to not become a
"conventional company", Page wrote that Google "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."
Google will continue to trade under its existing
stock market symbols, GOOG and GOOGL. The company's shares were up over 5 per
cent in after hours trading, following the post-close announcement.
All of the existing Google shareholders will see
their stock automatically changed to the new company, Alphabet.
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