Google announces radical overhaul with creation of new parent company called Google Alphabet

The company’s two founders created Google while at Stanford University in California in the 1990s, and have retained control of the company through its history, growing it into the internet’s biggest search engine and one of the world’s most valuable companies Google has announced a massive corporate overhaul that will see the internet giant separate its core business from its ambitious research divisions and owned by a new company,

Alphabet.Chief executive Larry Page, who co-founded Google as a university research project two decades ago, announced the creation of Alphabet, a holding company of which Google would be one subsidiary.Many of Google’s non-core operations, such as its life sciences division, secretive Google X research department, and Google Ventures investment arm, will be separated from the central business, which includes the Google search engine, YouTube and Android smartphone software and will retain the “Google” name.


The name Alphabet was chosen for two reasons, Mr Page said. It represents language, “the core of how we index with Google search”, and because Alpha-bet means “investment return above benchmark, which we strive to do”.Android dominates the smartphone market and YouTube is the world’s biggest video website.

However, Mr Page and Mr Brin have express loftier ambitions, investing heavily in medical science, space exploration and robotics. In a statement Mr Page said separating these areas from Google’s core business, which is driven largely by online advertising revenues, would allow such projects to have more independence.

The company says that “this new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google. Our company is operating well today, but we think we can make it cleaner and more accountable”.

Structure of alphabet

Google shares will become Alphabet shares, and existing Google shareholders will continue to hold a stake in all of the Alphabet companies.

Full details of Alphabet’s structure haven’t been released yet, but Page did mention several ventures that will be pulled out of Google and may become independent ventures under the Alphabet umbrella

  • Google’s life sciences research into things like glucose-sensing contact lenses
  • Calico, Google’s human longevity project
  • Google’s X Lab, which Page says “incubates new efforts like Wing, our drone delivery effort”
  • Google’s investment arms, Ventures and Capital

Google’s new CEO

Google’s new CEO is Sundar Pichai, who has been at the company since 2004. Last year, a management shakeup made him Larry Page’s top deputy. Fortune explained Pichai’s rise through the ranks in a 2014 article.