Google on Monday announced an overhaul of its structure through the creation of a holding company called Alphabet. This new entity is set to become the parent of all Group companies to separate Internet activities of others more experimental.
“Our company works well today, but we think we can make it clearer and more accountable. So we create a new company called Alphabet, “said Larry Page, co-founder and current CEO of Google, in a message posted on the band’s website.
Alphabet replace Google as an entity publicly traded. All actions will be Google automatically converted into securities with the same rights Alphabet by the end of the year. “This new structure will allow us to maintain a huge attention to the tremendous opportunities we have with Google,” writes Larry Page.
This surprise announcement after the close on Wall Street was welcomed by a jump in As almost 7% to 708 dollars in after-hours trading.
“Google thinned a bit”
“Alphabet is essentially an assembly of companies. The main course is Google, “which she will hold 100%, says Larry Page. “The new Google is a little thinner, companies that are quite far from our main Internet products are now placed within Alphabet.”
Google and retain the main activities of the group or the heart business on the Internet, such as search advertising online, mapping applications and the Android operating system, the online video service YouTube and technical infrastructure.
All the peripheral activities, as Google was much developed in recent years, but the cost aroused fears among some investors will be separated for their share and now depend directly Alphabet.
This is the case of Nest, the manufacturer of thermometers connected, or Calico, laboratory research on human longevity. Alphabet also hold the Life Science Laboratory, Google and Google Ventures Capital investment vehicles, super-fast fiber optic network Fiber and “X-Lab”, which serves as an incubator to a series of new projects.
Reshuffle to management
After this, Sundar Pichai, 43, current vice president of products, will become the new director General Google, including all current directors will integrate the management of Alphabet. Ruth Porat, joining Google in March from Morgan Stanley, including combine the positions of CFO of Google and Alphabet.
Sergey Brin, the other co-founder of Google, will become president of Alphabet and Eric Schmidt will be Executive Chairman.
“Sergey and I, we really try to start new things,” said Larry Page, believing in particular that the new structure is expected to “do things more ambitious “and have” a long-term view. “
” More transparency
Google, whose fiscal year corresponds to calendar year, said it was particularly present results by activity at the announcement of its accounts for the fourth quarter, according to Larry Page. But the group was not far detail in its results.
Google’s transformation should “give more transparency on these alternative activities,” noted Bob O’Donnell, head of consulting firm Research TECHnalysis. The structure will “see clearly how the core business behaves, what kind of margins it, while keeping an eye on innovations”, completed Trip Chowdhry, an analyst with Global Equities Research.
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