"G is for Google."
That was the opening line for Google Co-Founder Larry Page's press release today, in which he revealed that Google will be restructuring under a new parent company called Alphabet.
Below, we've broken down everything there is to know about this and what it means for Google.
Why make a new company?
Page claims Google is "operating well today, but we think we can make it cleaner and more accountable." He points out that some of their services, like Chrome, Android, YouTube, and Google Maps have over a billion users. However, Page claims that this will allow them to "keep a tremendous focus on the extrardinary opportunities... inside of Google."
What is Alphabet?
Alphabet is a large company that Google will operate under. It will consist of companies like Google, Life Sciences, Calico, and X lab (which consists of Wing, their drone delivery effort, as well as several research departments). It basically serves as a large company that acts as a parent company to make it easier for smaller companies to concentrate on smaller things. For example, it makes it possible for Google to concentrate on their companies (Google Maps, YouTube, etc.), Android to concentrate on Android, so on and so forth.
What does this mean for Google?
Google will maintain ownership of their Google products, such as Google Photos and Google Now. They will also maintain ownership of some companies with their own identity, such as YouTube.
Why 'Alphabet'?
Page says they chose the name based on it's meaning, a collection of letters that represent language, which is one of humanity's most important innovations. Also, it's the core of how Google Search is indexed. Lastly, they chose it because "it means alpha-bet (Alpha is investment return over benchmark), which we strive for!"
What does this mean for stockholders?
“Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on NASDAQ as GOOGL and GOOG.”
What do they plan on doing?
Alphabet plans on making sure each business has a 'great CEO' as well as making sure each business is doing well. Page also included a list of what he's excited about:
"-Getting more ambitious things done.
-Taking the long-term view.
-Empowering great entrepreneurs and companies to flourish.
-Investing at the scale of the opportunities and resources we see.
-Improving the transparency and oversight of what we’re doing.
-Making Google even better through greater focus.
-And hopefully... as a result of all this, improving the lives of as many people as we can."
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Jack Griffin is a writer for the VAVEL USA Technology and Music sections. Follow him on Twitter at @jacksonlgriffin.
