Google is restructuring itself under a new umbrella company called Alphabet, with CEO Larry Page and co-founder Sergey Brin as leaders overseeing a group of companies.
The largest of those companies will be a "slimmed-down" version of the old Google. Sundar Pichai, a beloved and trusted lieutenant to Page, will serve as Google's new CEO.
"Sergey and I are seriously in the business of starting new things," Page. "In the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.
"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. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President."
In the last several years, Google has been increasingly ambitious about expanding its scope of products beyond its juggernaut search engine. Its search and advertising business is still the most dominant in the world, making more than $50 billion a year. But as the Internet evolves, Page has been looking to where future revenue streams will come from. The company has made big bets on everything from smartphones to wearable devices to driverless cars.
In addition to Google, Alphabet will oversee Google X, the company's experimental research lab; Calico, the company's effort to increase the human lifespan; and Life Sciences, which works on projects like smart contacts for diabetes patients. YouTube, Google's massive video service, and Android, the company's mobile operating system business, will remain part of Google.
Page said he and Brin will "rigorously handle" money allocation, CEO compensation and business execution.
The move is a promotion for Pichai, who over the last year has taken on much more responsibility at Google. In October, Page announced that he would take less of a day-to-day role at the company to focus on Google's future, and handed most of the product operations to Pichai. That includes Google's most important products, like search, maps and Android. The new Google essentially focuses on these types of core products.
"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," wrote Page.
He said the new structure will help their aim of:
- Getting more ambitious things done.
- Taking the long-term view.
- Empowering great entrepreneurs and companies to flourish.
- Investing at the scale of the opportunities and resources we see.
- Improving the transparency and oversight of what we're doing.
- Making Google even better through greater focus.
- And hopefully...as a result of all this, improving the lives of as many people as we can.
Page said he and Brin chose the name Alphabet "because it means a collection of letters that represent language, one of humanity's most important innovations."
Alphabet Inc. will replace Google Inc. as the publicly traded entity, though the company will continue to trade under its familiar tickers GOOG and GOOGL. Investors reacted positively to the news, sending the stock up more than 6 percent in after-hours trading. (Page made reference to investors in his post as well, noting that "alpha-bet" also refers to a good return, "which is what we strive for!")
"G is for Google," he wrote. As for Alphabet, "we're still getting used to the name too!"