The sweeping reorganizations in Google were made starkly apparent with the appointment of Sundar Pichai as the new CEO of Google and the creation of a separate holding parent company called Alphabet Inc.
Pichai with an MA from Stanford University and an MBA from the University of Pennsylvania’s Wharton School joined Google in 2004 and has steadily risen in the ranks to become the new CEO in a restructured organization.
To better explain the whole operating structure, Alphabet Inc. is the parent umbrella org of search engine and advertising run by Google’s current leaders – Chief Executive Larry Page,co-founder Sergey Brin as President and Chief Financial Officer Ruth Porat. Under this will be the new Google subsidiary headed by Sundar Pichai which will include Google’s other businesses including YouTube, Android and Chrome OS as well as other units. Each Alphabet subsidiary is expected to have its own CEO all reporting to Larry Page and each unit under Alphabet will probably be set up as a spin-off public company. Just ahead of the announcement for Alphabet, Google’s market value was estimated at a whopping $444 billion.
When asked about the choice of name (Alphabet) Larry Page said, “We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search. We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!”
So, in effect, it is a complete reorganization, one which was announced in a blog post by Page who wrote, “We did a lot of things that seemed crazy at the time. 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.”
He continued saying, “In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well.”