Google restructures creating new parent company Alphabet to hold all of its assets

Google has announced a corporate restructure overnight creating a new holding company Alphabet to manage its many businesses, the largest of which will be Google.

In a blog post the company announced the major changes which sees head of product Sundar Pichai become CEO of Google’s core search engine business, while co-founders of the search giant Larry Page and Sergey Brin will step up to be CEO and president of Alphabet, respectively.

“As Sergey (Brin) and I wrote in the original founders letter 11 years ago, ‘Google is not a conventional company. We do not intend to become one’,” writes Page in the blog post.

“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.”

Alphabet’s new website is https://abc.xyz/.

Google shares will be converted into shares of Alphabet with the Guardian reporting the new structure is likely to be similar to Warren Buffett’s Berkshire Hathaway, which owns a number of diverse holdings and has stakes in several others.

According to the blog post Google will be “slimmed down” with the companies various non internet related interests now overseen by Alphabet.

The post cites its various health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity) while other businesses that are likely to move include research and development company X lab,  learning thermostat company Nest and fiber to the premises company Fiber, and the drone-delivery service Wing.

It is thought the move will also insulate the main Google business from reputational damage caused by faltering development projects, as happened with Glass and Google+.

Google employs around 1,000 people in Australia and it is understood that the announcement will have minimal implications locally.

The company declined to comment on whether today’s announcement will have implications on the tax Google pays.

Earlier this year, Google Australia drew headlines after Australian managing director Maile Carnegie, along with other tech bosses, were called before a Senate inquiry on tax avoidance but were forced to plead ignorance of their company’s tax structures.

“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” Page wrote in the blog.

“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.”

Nic Christensen