Google gets absorbed by the new Alphabet conglomerate

Google co-founder Larry Page announced a big operating structure change at Google. The search giant is creating a new conglomerate called Alphabet, this new company will see Larry Page as CEO and Sergey Brin as president. Alphabet is described as a collection of companies, the largest of which will be Google.

The G is for Google but some parts of Google that are pretty far afield from the main Internet products, like Google's health efforts, will now be run more independently. Other parts of Alphabet will include the X lab, which includes Google's Wing drone delivery effort, as well as the Ventures and Capital divisions.

Another big change is that Sundar Pichai, who joined Google in 2004 and was rumored to be one of the top contenders for the CEO position at Microsoft in 2014, becomes the new CEO of Google:

This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google. A key part of this is Sundar Pichai. Sundar has been saying the things I would have said (and sometimes better!) for quite some time now, and I’ve been tremendously enjoying our work together. He has really stepped up since October of last year, when he took on product and engineering responsibility for our internet businesses. Sergey and I have been super excited about his progress and dedication to the company. And it is clear to us and our board that it is time for Sundar to be CEO of Google. I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that. Google itself is also making all sorts of new products, and I know Sundar will always be focused on innovation—continuing to stretch boundaries. I know he deeply cares that we can continue to make big strides on our core mission to organize the world's information. Recent launches like Google Photos and Google Now using machine learning are amazing progress. Google also has some services that are run with their own identity, like YouTube. Susan is doing a great job as CEO, running a strong brand and driving incredible growth.

In his long letter, Page describes Alphabet as a way to get more ambitious things done and to take the long-term view. Alphabet promises to make the company cleaner and more accountable, while also empowering great entrepreneurs and companies to flourish.

For shareholders, nothing changes as all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same voting rights. The company's two share classes will continue to trade on Nasdaq as GOOGL and GOOG and management hints they also strive to continue to be alpha-bet (Alpha is investment return above benchmark).

For Sergey and me this is a very exciting new chapter in the life of Google—the birth of Alphabet. 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! I should add that we are not intending for this to be a big consumer brand with related products—the whole point is that Alphabet companies should have independence and develop their own brands.

The URL of the new congolomerate consists of the first three and the last three letters of the alphabet: abc.xyz. Curiously, the source code contains a hidden link to Hooli, a fictional version of a Google-like company in HBO's Silicon Valley TV show.