The Google name will not die. Divisions under the “Google business” will included search, ads, maps, apps, YouTube and Android — essentially the current-Google’s best known businesses. Newer business lines such as aging research division Calico, smart home acquisition Nest, internet provider Fiber and investing arms Google Ventures and Google Capital will be managed under Alphabet.
“Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet,” wrote Google co-founder and current CEO Larry Page in a post to the official Google blog. Page will become CEO of Alphabet and co-founder Sergey Brin will become president. “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.” The goal it seems it to run more nimbly as a collection of smaller companies rather than one behemoth of only loosely related things.
Current chairman Eric Schmidt will become the Executive Chairman of Alphabet, Ruth Porat will become the Senior Vice President and Chief Financial Officer of Alphabet while retaining the same role at Google. Sundar Pichai will become CEO of Google. He is currently senior vice president of products.
Later this year Google shares will automatically convert to Alphabet shares and shareholders will retain the same rights. The company will continue to trade under the tickers GOOGL (for the Class A shares that carry voting rights) and GOOG (Class C shares with no voting rights). Starting in the company’s Q4 earnings report Google financial results will be reported separately from Alphabet as a whole.
Shares popped on the news. By around 5 p.m. the stock was up close to 5.5% from Monday’s closing price of $633.73.