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Slimmed-down Google to be part of new parent Alphabet

Published 11/08/2015

Google is changing its operating structure to become part of holding company Alphabet (AP)
Google is changing its operating structure to become part of holding company Alphabet (AP)

Google is to be slimmed down as part of a surprise shake-up that will see it operate under a new parent company called Alphabet.

The search engine, YouTube and Android operating system will remain under the Google brand, while newer businesses, such as its research and investment arms, will work as separate parts of the new conglomerate, the firm announced.

Google co-founder Larry Page will be Alphabet's chief executive, while his partner Sergey Brin will be president of the umbrella company, while former Android chief Sundar Pichai will replace Page as Google's new chief executive.

He said the reorganisation would help Google "continue to make big strides on our core mission to organise the world's information".

The company's mysterious X lab, responsible for developing initiatives such as drone delivery business Project Wing, will now operate under Alphabet, as will its Life Sciences division, which is developing a glucose-sensing contact lens.

Announcing the move on Google's website, Mr Page said: "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.

"Our company is operating well today, but we think we can make it cleaner and more accountable.

"Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed."

Of his replacement at Google, Mr Page said: "Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I've been tremendously enjoying our work together. He has really stepped up since October of last year, when he took on product and engineering responsibility for our internet businesses.

"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."

The name was chosen because it refers to a collection of letters which make up a language and "is the core of how we index with Google search", Mr Page said.

Alphabet will replace Google as the publicly-traded entity and all shares will be transferred automatically.

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