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Google to Reorganize Into New Company Called 'Alphabet'

Entrepreneur -- Say goodbye to Google. Say hello to Alphabet.

Google Inc. says it is creating a new operating structure under a newly formed umbrella company it is calling Alphabet Inc. Co-founder and current CEO Larry Page will lead the new company, while Sergey Brin, the other co-founder, will serve as president.

Google itself will be an operating unit and get a new CEO: Sundar Pichai, who had been running Android and Chrome. 

It's not just a name change, but a reorganization of the company. In a blog post announcing the change, Page said they wanted a "slimmed down" version of Google, with other businesses, such as Life Sciences and the Calico biotech unit to be their own operating companies. Each unit, Page suggested, would get its own CEO.

Page sought to position the move as a further move toward the technology-driven disruption and innovation he, Brin and Google have all long espoused. "We did a lot of things that seemed crazy at the time," Page wrote. "Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super excited about."

Yet, the move positions Google as far more traditional than disruptive. Many companies have found that a conglomerate model -- which is essential what Alphabet will be -- helps manage the overall company better by putting key executives in charge of the underlying companies, leaving the top management to focus on making the company work as a whole.

Indeed, Page, in his blog post, said as much. "In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed," he wrote. "We will rigorously handle capital allocation and work to make sure each business is executing well."

Read the rest of the story here: http://www.entrepreneur.com/article/249432



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