Aug 10

Google Renames Itself “Alphabet”, Stock Soars (ZeroHedge, Aug 10, 2015):

It’s long been difficult to catalogue everything that Google does, and apparently Google couldn’t keep up with anymore either because the company has unveiled a somewhat bizarre restructuring effort that will see “Google” become a wholly-owned subsidiary of a new holding company called “Alphabet.”

Google directors will become Alphabet directors, Larry Page will be the holding company’s CEO, and Page’s deputy Sundar Pichai will now be CEO of Google. Alphabet will replace Google as the publicly traded entity, Google shares will become Alphabet shares, but the tickers will remain as is – or something. Here’s Bloomberg trying to put it in perspective.

Google is adopting this structure in order to make clearer the difference between its main business and longer-term endeavors, as Page and Brin take on more strategic roles, while leaving operational management to trusted deputies.

Of course in today’s market, all news is good news even if it’s almost impossible to digest and evaluate, or maybe traders presume the move will be somehow “tax advantaged”, but whatever the case, the stock is soaring in AH trading.


Here’s the full statement from Google.. err.. Alphabet:

Google Announces Plans for New Operating Structure

August 10, 2015

G is for Google.

As Sergey and I wrote in the original founders letter 11 years ago, “Google is not a conventional company. We do not intend to become one.” As part of that, we also said that you could expect us to make “smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.” From the start, we’ve always strived to do more, and to do important and meaningful things with the resources we have.

We did a lot of things that seemed crazy at the time. Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super excited about.

We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. 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. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.

What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.

Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation. In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole.

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.

Sergey and I are seriously in the business of starting new things. Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure.

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.

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.

We are 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.
  • What could be better? No wonder we are excited to get to work with everyone in the Alphabet family. Don’t worry, we’re still getting used to the name too!


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One Response to “Google Renames Itself “Alphabet”, Stock Soars”

  1. Marilyn Gjerdrum Says:

    The scam called the Greek bailout is keeping the market afloat today……lets see where it is by Wednesday. Changing a name causing a stock to rise tells me there is manipulation, not growth.

    Last week, I forget if it were Wednesday or Thursday, the market was down 151 points at 4PM eastern. After closure, fifteen minutes later, it registered down 91 points…….a 60 Billion dollar adjustment.

    I have been buying stock since I was 14 and my dad took me down to buy my first block of stock…….In all the years since, I have seen closing numbers adjust by a point or two…….Each point indicates One Billion dollars……..But, I have never seen such a blatant manipulation in all my years of monitoring economic trends and the markets. That was crooked, or I’ll eat all my hats…….

    It happened again on Friday, the market was down 120 points plus at closing, it was adjusted at 48 points down. This ought to scare the hell out of everyone who considers themselves an old fashioned investor, not a greedy gut multi-million dollar manager. Someone is losing on this, and a very few are cleaning up.

    We have no oversight of our moneychangers any longer, and they are running amok. The talking heads and the financial websites mostly pitch the daily lies……Zerohedge and Financial Collapse are two exceptions.

    We have passed the point of any sane resolution. A few people are going to clean up while the rest of the investors will lose their shirts. How such outright flim flam can go on tells me we are as corrupt as China. Greedy guts rule, and sane people ought to get out of the markets, and bury their cash in the backyard like so many people during and after the Great Depression.

    Our real unemployment rate is 93.8 long term unemployed out of a working age population slightly over 200 million. That is close to 50%, which was the real unemployment at the depth of the Great Depression. Ironic to note that 50% of Americans now live in poverty. Does anyone else see a connection?

    This false “recovery” is the worst sham ever perpetuated on the American people…….But, people don’t hear the truth, just the lies about 5.3% unemployment…….This is what happens with the suppression of a free press, and our’s is as dead as Caesar. The Wall Street Journal fired an employee last week who asked Janet Yellen questions she didn’t like. What kind of nation does that? A dictatorship, and that is what we have….

    A name change? Give me some truth, please. I guarantee the stock will go back down within two days…….One term I liked was one calling the financial BS put out by the banks and AIG since 2008 has created a supernova that cannot be contained.

    Truth is a funny thing, it is good to hear it, yes. But, it is also implacable, it cannot and will not change at will. We are facing a global collapse that has been building up steam since 2009…….China contributed heavily to the problem. The German loans to the Euro nations are another example, the FEd giveaway to greedy gut bankers has gone on for too many years…….A financial supernova indeed.

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