Google announced a major shakeup this week as company founders announced the creation of a new overarching firm called Alphabet Inc. to oversee and manage the Mountain View tech giant's various ventures.
As part of the change, longtime Google CEO Larry Page said he would hand over the reins of the company's mainstay search engine division to the company's product chief, Sundar Pichai. Meanwhile, Page and co-founder Sergey Brin are becoming the new CEO and president at Alphabet.
Explaining the change in a company blog post Monday, Page said the new company was created to improve transparency and control over the company's diverse business ventures. Google, which started in 1998 with a newfangled web search algorithm, is today considered a leader in dozens of different fields, including self-driving cars, drone package delivery and anti-aging research.
In Mountain View, the announcement came as big, albeit cryptic news. With more than 11,000 employees in town and plans to hire many more in near future, Google plays a significant role in nearly all aspects of city management. A Google spokesperson said the company has no plans to leave Mountain View, and it would continue to grow its operations here.
City leaders say they learned of the company's plans on Monday just like everyone else. It doesn't look like the news signals any change for the company's relationship with Mountain View, said Councilman Mike Kasperzak.
"The obvious questions here is, does this have any implications on the day-to-day realities of Mountain View," he said. "My supposition is that it does not."
In his post, Page explained that restructuring the company would provide better management scale by running unrelated projects independently. Each mini-company underneath Alphabet would have its own CEO and leadership organization.
Meanwhile Alphabet is remarkably lean, with just four employees based out of Google's Mountain View offices. Google officials pointed to Warren's Buffet's firm Berkshire Hathaway as another example of a skeletal company that nonetheless controls enormous capital clout.
For now, company officials said the Google arm of the company would be "slimmed down", but would still include the search engine, advertising, maps, apps and Android smartphone divisions. Other Google ventures would be restructured directly under Alphabet, such as home automation (Nest), biotech (Calico) and urban planning (Sidewalk).
"For Sergey and me this is a very exciting new chapter in the life of Google — the birth of Alphabet," Page wrote.
"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!"
Comments
Blossom Valley
on Aug 11, 2015 at 2:32 pm
on Aug 11, 2015 at 2:32 pm
For all you Google haters, wise up. If Google decreases its presence here or God forbid moves, all those complaints about overcrowding and insufficient housing will be over, as will the huge increases in the value of our houses. All those who planed to retire on the equity in their house will be working for another 20 years!
This means you - City of MV. I hope you start working WITH Alphabet more than you worked AGAINST Google!!!
Old Mountain View
on Aug 11, 2015 at 2:46 pm
on Aug 11, 2015 at 2:46 pm
Google basically split their unprofitable divisions away from their profitable divisions, so they didn't have to pay extra tax on the research and employees there. Once the smaller divisions become profitable, they'll move into the "profit" arm.
This is all just a way for a huge corporation to avoid paying their fair share of taxes.
Rex Manor
on Aug 11, 2015 at 3:59 pm
on Aug 11, 2015 at 3:59 pm
"Cautious" obviously has no understanding of either corporate operating statements or tax calculations. The new company will be taxed on the same basis as the prior business. Losses get combined with gains for net profits, and expenses get deducted in all or in part(600 page tax code) and taxes calculated accordingly. Refer to Berkshire Hathaway investment offering for some inexpensive education.
Blossom Valley
on Aug 11, 2015 at 4:30 pm
on Aug 11, 2015 at 4:30 pm
@Cautiously Optimistic
who are you the voice for Alphabet/Google
Not all property owners are supporters of Google. In fact
Old MV residents didn't worry about property taxes tell Google came along.
Old Mountain View
on Aug 11, 2015 at 4:52 pm
on Aug 11, 2015 at 4:52 pm
It may or may not save them tax money, but it definitely lets them hide their financials much more easily:
Web Link Creating Alphabet allows them to be much more opaque and secret than Google could ever be.
A reminder: Google is not a Mountain View company; it's a Delaware company.
Cuernavaca
on Aug 11, 2015 at 5:04 pm
on Aug 11, 2015 at 5:04 pm
Next: Lawsuit against Campbells for trademark infringement with their popular Alphabet Soup.
Shoreline West
on Aug 11, 2015 at 8:43 pm
on Aug 11, 2015 at 8:43 pm
@Delaware:
Articles of incorporation are a different beast that isn't particularly relevant to this discussion. Google is headquartered in Mountain View and is thus subject to local tax regulations.
Moreover, Google's physical presence in Mountain View has strong repercussions locally, as many Google employees use Mountain View streets, many of them reside here, pay taxes, spend money in the local economy, etc.
Arguing that Google is a Delaware company is a narrow-minded, rather dim-witted oversimplification of a topic that is much broader than articles of incorporation.
For that matter, Google's actions do not materially affect Delaware residents on a major level, certainly nothing like clogging up their roads or paying property taxes.
Let's keep the topic relevant to real-world material impact, rather than diverge into the obscure legal mumbo-jumbo that has little relevance to what matters to a broader audience.
Thanks.
Stierlin Estates
on Aug 11, 2015 at 9:33 pm
on Aug 11, 2015 at 9:33 pm
Guess what, Google should have googled alphabet, it's part of BMW. Just google it or try alphabet.com. Not to smart.
another community
on Aug 11, 2015 at 9:58 pm
on Aug 11, 2015 at 9:58 pm
Maybe they'll rebrand as Alpha Beta and deliver groceries.
another community
on Aug 12, 2015 at 7:52 am
on Aug 12, 2015 at 7:52 am
Alphagoogle, Googlesoup, Googalpha, the possibilities for our lexicon are going to be interesting.
Old Mountain View
on Aug 13, 2015 at 10:51 am
on Aug 13, 2015 at 10:51 am
As a stockholder, I noticed that the GOOG stock price is up $30 (5%) since this news came out. MV Voice readers may whine, but the stock market is optimistic about this reorganization.
fyi - business newspapers are reporting that there is no tax benefit to this new corporate structure. The main benefit is boosting transparency into the leadership and operation of the new divisions.
Cuesta Park
on Aug 13, 2015 at 12:04 pm
on Aug 13, 2015 at 12:04 pm
While it is true long time residents had no worry of property taxes prior to the tech boom in Mtn View (Which pre-dates Google btw, by about 10 years)
but they also got to see the value of their homes going up 10-20 fold. Yes, my taxes went up some, but my paid for 63K house is also now worth $1.7 Million.
I'll deal with the taxes, and thank you Google, from this member of the MVHS class of 1968.