It’s not often that a company with a market cap of over $400 billion announces a massive operational restructuring plan that will undoubtedly hog the public conversation in tech social circles for months to come. Yet, that’s exactly what Google did today.
Under terms of the restructuring plan announced today by Larry Page, Google is rebranding itself as a new company called Alphabet. The core Google products you’ve come to know and love — YouTube, Android, Google Search, Gmail, Chrome, and Maps — aren’t getting the new branding but they will operate as a single unit under the Alphabet umbrella. The move, according to Page, is intended to provide more transparency to the company’s quarterly operations while also allowing Alphabet to better focus on other large entities such as Nest, Calico, Google X Incubator, and more.
“Our company is operating well today, but we think we can make it cleaner and more accountable,” Page wrote, adding that he’ll stay on as CEO of Alphabet while fellow cofounder Sergey Brin assumes the role of president. “Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.”
Page said each entity under the Alphabet umbrella will continue to have their own CEOs and management teams, while he and Brin will presumably operate from afar on an as-needed basis. As part of the news, Page also announced that Sundar Pichai will take over as CEO of a “slightly slimmed down” Google.
Also of note, Alphabet will now begin breaking out financials separately for each of the groups it overseas. That means we still won’t really know how much revenue YouTube is generating, but we should be able to see quarterly updates specific to Nest, etc.
Today’s announcement also creates many new questions about how Alphabet will differ from Google — some valid, and some that are more speculation. For example, while Google has previously let it be known that it wasn’t interested in acquiring leadership-deficient social network Twitter, can the same be said of Alphabet? What about Alphabet hopping into other markets (like ride sharing), such as those it showed little limited interest in previously? Time will tell, but at the very least you’d be hard pressed to call this anything short of interesting.