In a letter recently published on the official Google blog, Larry Page has announced that he is retiring from the position of CEO of Google. Instead he — with Sergey Brin — has founded a new company called Alphabet Inc. Google would be reorganized into this new holding company. Larry Page will be the CEO while Sergey Brin would serve as the President of this newly formed company.
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 (http://abc.xyz). I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.
This new company structure would provide more transparency to how Google invests in projects like driver-less cars, high-speed or balloon internet and etc. It would also make acquisitions easier if they plan to start a new business line. Larry explained this in his blog post, as follows:
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. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.
What Larry and Sergey have planned is that basically different small companies will work on different products, operating under Alphabet Inc. Google will be one of them and as Sergey stated above, obviously the largest one as well. Every company will have it’s own CEO who would be able to consult with Larry and Sergey if need be.
This was definitely quite an unexpected and unconventional move from Google. The most prominent reason for this would be to allow Alphabet Inc. to pursue more ambitious projects without worrying about them affecting other products. On the other hand, this move will also provide a peace of mind to investors by showing them more transparently what they are investing in.
Source: Google Blog