Larry Page has a new job.
The former Google CEO announced in a blog post Monday that he is now CEO of Alphabet, a new “collection of companies” that includes Google, Life Sciences and Calico. Sergey Brin, Page’s co-founder of Google, will become president of Alphabet and Eric Schmidt will be its executive chairman.
Meanwhile, Sunder Pichai, Google’s former senior vice president of products, will be taking over as Google CEO. Bloomberg last year dubbed Pichai “the most powerful man in mobile.”
Even as it’s folded into Alphabet, Google will retain its Search, Maps, Android, YouTube and ad businesses.
Investors should know that Alphabet Inc. will replace Google on the stock market, though Page wrote that “all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights.” The company will continue to trade on the Nasdaq under the labels GOOGL and GOOG.
Google stock jumped about 5 percent in after-hours trading.
The thinking behind the switch isn’t incredibly clear from Page’s blog post. Here’s the relevant chunk:
[pull_quote_left]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.[/pull_quote_left]
He added, “Don’t worry, we’re still getting used to the name too!”
