August 11 ,2015 | by Thiago Kiwi

Alphabet: Google stuns markets with restructuring

Google restructuring

Internet search giant Google has surprised economists around the world by announcing that it will become part of a holding company called Alphabet, shared in a blog post by co-founders Larry Page and Sergey Brin.

As part of the changes, Google will be rebranded as Alphabet. Control of the company’s search engine services will be handed over to Sundar Pichai, who will become the CEO of Google.

Mr Page will become the chief executive officer of Alphabet, and Mr Brinn will be the company’s president. The existing board of directors and chief financial officer will also move to the new company, suggesting that little will change regarding Google’s immediate management.

A more streamlined Google

Mr Page and Mr Brin said: “Google is not a conventional company. We do not intend to become one.

“As part of that, we also said that you could expect us to make ‘smaller bets in areas that might seem very speculative or even strange when compared to our current businesses’. From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have.”

The pair said that the aim of the decision was to streamline Google, which has recently invested in such diverse projects as driverless cars, smart technologies and medical research. They also hope that the move will help make Google’s finances more transparent and accountable - an issue that has previously been raised by economists and shareholders.

Markets reacted positively

The company’s shares will automatically convert to shares in Alphabet, and some of Google’s more unusual ventures will exist as separate companies under the Alphabet umbrella. In addition to this, the company’s Internet of Things work and broadband service will be separated from the core business.

However, its Android offerings, Youtube and map services will remain part of the new, stripped down incarnation of Google.

Markets around the world have reacted positively to the news, with Google shares experiencing a significant hike in after-hours in the wake of the founders’ blog post.

Top image by Maurizio Pesce on creativecommons. 


Thiago Kiwi

Thiago is the LSBF Blog Editor who manages news and features content on the site, and writes about business, finance, technology, education and careers.

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