aphabet, the new name of Google, was not chosen by chance. “We liked this Alphabet because it evokes a collection of letters that form the language, one of the most important innovations of mankind,” writes very simply Larry Page, the CEO of Google on his blog in a post published Monday. The Silicon Valley giant announced late Monday a major reorganization, with the creation of a holding company called Alphabet, will now be housed under which all its activities, starting with the famous search engine. The new headquarters will house a group “Business Collection” in the words of Larry Page. What are its future titles will be listed and not those of Google Inc, which will become actions Alphabet. The structure, which has no 24 hours, already has a website of its own, with such a universal address that his baptismal name: abc.xyz.
This new architecture, including the announcement Monday night panicked markets (the title took more than 6% in after market trading) is supposed to reflect the group’s history, the become an Internet start-up a real diversified conglomerate, now valued $ 445 billion. “ Our company works well today, but his organization could be cleaner and more efficient” , acknowledged Larry Page. The first idea is to make it clearer and simpler organization to better isolate each business while maintaining an entrepreneurial spirit. As in all groups controlled by a holding company, alphabet will remain a lightweight structure compared to the current Google. It directly oversee all business developments outside the web, such as health, science, private equity or Calico, the biotechnology company. Businesses related to the Internet, such as advertising, mapping, or YouTube Android operating system, which still exude the essence of the group’s revenues, however remain in the bosom of Google, which will become itself a subsidiary of the holding company .
“This will make the management more efficient, allowing us to run independently of the activities that have nothing to do with each other, explained Larry Page. It will be for the Alphabet to grow independently and with strong leaders. (…). Sergey and I will be there to help. ” As an investment fund, each subsidiary officer report directly to Alphabet.
By clarifying the organization, creating Alphabet also responds to fears of some investors who fear that the group is dispersed in remote thoughts of his heart craft, such as driverless car or pill that detects cancer. They also demanded more transparency and visibility into the performance of different trades. Eventually, some analysts believe that the organization openly inspired by that of Berkshire Hathaway, the holding company of billionaire Warren Buffett’s investment, will even assign certain activities.
A sign that the reorganization is really structuring: management also changes during the big bang. Larry Page will take the general direction of alphabet, while the co-founder Sergey Brin will be the President and the Executive Chairman Eric Schmidt. The winner of this game of musical chairs is unquestionably Sundar Pichai, 43, hitherto responsible for the products, which becomes CEO of Google. Ruth Porat, Google recently appointed Chief Financial Officer, will become Chief Financial Officer for its head the holding company.
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