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Google to reorganize as Alphabet

By New York Times

Aug 11, 2015

Google announced that it is reorganizing under a new name — Alphabet — and separating its moneymaking businesses from the moonshot ones.

Google’s move is the most significant step by a Silicon Valley giant to get a handle on the sprawl of businesses that it has entered, an issue that increasingly afflicts other technology companies like Facebook and Amazon. While all of these tech companies began as entities focused on one main business, online bookselling or a social network, for example, many have diversified over the years into numerous side businesses including cloud computing, photo sharing and even satellites.

Some of those tech companies have started to give more clarity to their fast-growing new businesses. This year, Amazon broke out the results of its cloud-computing unit for the first time. But Google is going a step further than the rest by formalizing a portfolio-like approach to its various businesses.

Under the new structure, Mr. Page is to run Alphabet along with Sergey Brin, who co-founded the web search business with him in 1998. Alphabet would be the parent entity, housing several companies, with the biggest among them Google. In addition, the portfolio would include Nest, the smart-thermostat maker, and Calico, a company focused on longevity, among other things. Sundar Pichai, who had been senior vice president in charge of products, will be chief executive of Google, which will encompass Internet products like search, maps, YouTube and applications like Gmail.

“For Sergey and me this is a very exciting new chapter in the life of Google — the birth of Alphabet,” Larry Page, the chief executive of Google, wrote in a blog post on Monday. “We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search.”

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