Google forms new parent company as part of restructuring plan
The US-based tech giant, Google, has unveiled plans to renew its structure by establishing an umbrella corporation, called Alphabet, to cover the activities of its various subsidiaries.
The surprise announcement was made by Google’s chief executive, Larry Page, who said Alphabet will be the umbrella company for the tech giant's research arm X Lab, investment unit, Google Ventures, and health and science operations, as well as the search unit, Google, AFP reported.
Google’s current vice president, Sundar Pichai, will be its chief executive officer (CEO) after the new company is formed.
"Our company is operating well today, but we think we can make it cleaner and more accountable," said a statement released by Page, who co-founded Google with Sergey Brin.
The statement added, "So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as president."
Page noted that Alphabet is "mostly a collection of companies," the largest of which is Google.
Under the new corporate structure, "this newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead," he added.
According to Page, the parent company will be also in charge of the drone delivery project, known as Wing, and investment arms of Google.
"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related," page said, adding, "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."
Page also explained that Alphabet Inc. will replace Google Inc. as the publicly traded company, and all shares of Google will be automatically converted to shares of Alphabet, with all of the same rights.
In the new corporate structure, Google will become a wholly-owned subsidiary of Alphabet.
For many years, Google has been the leading name in Internet search and has turned advertising linked to those searches into a highly lucrative business.
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