Google on Tuesday restructured its organization bringing some new changes and announced it was appointing India-born Sundar Pichai as the new CEO.
The company has now decided to separate internet business with other projects and labeled it under a new ‘mother’ company called Alphabet.
Sundar Pichai will be in charge of Alphabet’s new Google subsidiary, including the search engine, YouTube and the Android and Chrome operating systems.
Larry Page will serve as CEO of Alphabet and Google co-founder Sergey Brin will serve as president.
Talking about Sundar Pichai, Page said, “In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation.”
Pichai, 43, is a native of Chennai who went to IIT Kharagpur and later to Stanford and Wharton. He took over Gmail and Google Docs in 2011. In 2013, CEO Larry Page put him in charge of Android, making him one of the most powerful technology executives in the world.
Explaining the creation of this mother company, Google co-founder Larry Page wrote on her blog, “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.”
In other words, Google will continue to run internet-centric services such as Google Maps, YouTube, Chrome, and Android. The new company, Alphabet will include, besides Google, units such as Calico (which focuses on Longevity), X lab (which incubates new efforts like Wing, Google’s drone delivery effort) and units dealing with life sciences (such as the one working on smart contact lens that detects blood sugar level). Google’s investment arms, Ventures and Capital, will also be a part of Alphabet.
Explaining the rationale for the restructuring, Page wrote, “We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant. The new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google.”
According to Page’s post, Alphabet will eventually replace Google as the publicly traded company on the Nasdaq stock exchange, and all shares of Google will convert to shares of Alphabet. However, it will continue to trade on the Nasdaq under the same GOOGL and GOOG ticker symbols.