A massive corporate overhaul separates Google’s core business from its research divisions with a new holding company, Alphabet. An overall corporate restructuring where Alphabet becomes the parent company and Google, one of its biggest subsidiary. Google will work with Mr. Sundar Pichai as its CEO, its core business being:
- Web advertising
Founder and CEO (should I say ex-CEO) of Google, Larry Page will head Alphabet with its ambitious research projects such as
- Life Sciences division Calico
- Google X
- Home automation company Nest Labs
- Investment group Google Ventures
- Internet service provider Google Fiber.
- This chart can explain the restructuring better
Reason for restructuring:
This big move of Google is said to be nothing more than a major corporate restructuring. Pichai, Page’s effective number two will still work forward with Page as his boss. The changes may only be primitive and cosmetic. The restructuring is said to solidify the importance of Page and Brin, founders of Google, who still control Google in spite of its dual-class share structure. It is aimed to focus on the research projects. “This frees up time for me to continue to scale our aspirations” Says Mr. Larry Page.
Market effects of restructuring:
- Google is said to have no significant change in its market structure except for the name.
- Google shareholders will simply become Alphabet shareholders.
- Tickers for google’s stock listed in NASDAQ will remain GOOGL and GOOG.
- According to the analysts the new corporate structure would improve transparency.
- It will allow investors to see the real value of the company.
- The added advantage is that it can offer, “chief executive” title to more number of people.
Both Alphabet and Google will release quarterly financial results.