Google has announced a major reorganisation, creating an umbrella company called Alphabet under which Google will be run. The surprise announcement was made by co-founder of Google Larry Page, who said he and co-founder Sergey Brin wanted to make the company "cleaner and more accountable".
Page said: "For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. 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!
"We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive for. I should add that we are not intending for this to be a big consumer brand with related products — the whole point is that Alphabet companies should have independence and develop their own brands."
The reorganisation will see Page operate as CEO of Alphabet while Brin will become president. The restructuring will also be a major boost for the current head of Android Sundar Pichai who will now become the CEO of Google.
Speaking glowingly of Pichai, Page said: "I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that."
Among the multitude of company's under the Alphabet brand, Google will obviously be the largest and will continue to incorporate search, maps, YouTube and Android, as well as Chrome.
While the rebranding comes as a surprise to everyone else, Google has clearly been thinking about it for some time as the company's new holding website abc.xyz was first registered in March 2014.
Google will be just one of the companies that will be run under the Alphabet brand, including Nest, which makes smart home devices; Life Sciences, which works on the glucose-sensing contact lens; Fiber which is proving fast broadband to US cities; and Calico which is focused on longevity. Page also announced the company's X Labs, where it develops what are known as moonshot projects, will also fall under the Alphabet umbrella.
"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related," Page said.
In terms of the financials, Alphabet will replace Google as the publicly traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights.