Google name change to Alphabet shocks Wall Street

Google stunned investors last night by unveiling a radical restructuring that will see it become part of a holding company named Alphabet.

 

Shares in the global tech giant jumped in after-hours trading after co-founder Larry Page published a blog post detailing the new plans.

 

The move is designed to differentiate between Google’s core operations and its more left-field businesses such as drone experiments and venture capital investments.

 

A big winner from the shake-up is former product boss Sundar Pichai, who will now be the chief executive of Google.

 

“Sergey [Brin] and I have been super excited about his progress and dedication to the company,” Page wrote. 

 

“And it is clear to us and our board that it is time for Sundar to be CEO of Google.”

 

The new organisation will function as a “collection of companies”, with Google the largest one.

 

The idea behind the new organisation is to slim down Google itself, Page said.

 

“We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes,” Page added. “But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.

 

“Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet.”

 

Page will be taking on the role of chief executive of Alphabet. Brin will be president of the new company, while Eric Schmidt will be executive chairman.

 

Ruth Porat, who is currently the chief financial officer of Google, will take up the same position at Alphabet. Google’s current directors will become directors of Alphabet.

 

Alphabet will replace Google as a publicly-traded entity, with Google shares automatically converting to Alphabet shares.

 

The new slimmed down Google will retain businesses such as maps, YouTube and Android products.