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Google announces sweeping changes to operating structure

Yesterday, Larry Page and Sergey Brin announced a complete overhaul to the existing Google operating structure, which will separate the mass of companies which they currently own into a more independent operating system.

A new company called Alphabet will replace Google as the title name of the massive multinational company, which currently owns highly successful enterprises YouTube, Android, AdWords, Blogger, Google Maps, and Chrome amongst others. Google will become a subsidiary company of Alphabet with a new CEO.

The aim of Alphabet is to enable strong business leaders to step up as individual CEOs for each business. Long-time Google employee Sundar Pichai will take over the mantle of Google Search, and its associated products, while founders, Page and Brin, will deal with execution of strategy and capital allocation.

Alphabet will also replace Google Inc. as a publicly-traded entity, with shares being maintained in NASDAQ by all investors. The new company will not only focus on directing growth within the Alphabet portfolio, via capital allocation and strategy, but will also act as an experimental, future-focused parent company which will run the X Lab (responsible for Google Glass), Ventures, Capital and Wing (a drone delivery initiative).

Google Search will be just one of the applications offered as part of your Google identity, incorporating into the suite of apps which feature on the Google Search homepage. The homepage is currently a jumping-off point for other products such as Maps, YouTube, the Play Store, Drive, Calendar and Photos.

There are still many questions being asked about how the new company will operate and what kinds of projects they will pursue. Very little information has been released; only a brief post on the new Alphabet site and Google’s investor relations space explains the motivations behind the change. Former Google (and now Alphabet) CEO Larry Page, explained that he and his fellow Google co-founder Sergey Brin never wanted their company to fit the conventional storyline for a tech venture.

Page further explains that the new structure will enable the duo to invest in projects which are slightly more complex and risky. Examples include Calico and Life Sciences, both projects which are very different to their current technology-focused projects, focusing predominantly on the human body and health.
The ultimate aim of Alphabet will be to create an even greater force for the improvement of people’s lives globally, by being more ambitious, transparent, and empowering, according to Brin. Google is not a conventional company. We do not intend to become one.”