What yesterday was Google, today is called Alphabet, but under the umbrella of the new name is a wholly-owned subsidiary that will still be named Google focusing on Internet products.
The company, which was founded in 1998 and went public in 2004, announced its new operating structure in a blog post on Monday called “G is for Google.” The name Alphabet was chosen because it means a collection of letters that represent language, one of humanity’s most important innovations. They 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
A number of other companies are working on disparate projects like the company, Calico, a life sciences company working on a glucose-sensing contact lens, the lab formerly known as Google X and investment arms Google Ventures and Google Capital, just for starters. It seems that some of the company’s biggest properties like Android and YouTube will remain a part of the smaller Google.
The creation of Alphabet could hopefully give more of the company’s many diverse projects a fighting chance of reaching fruition by having the support and independence required to go the distance. The company has made big bets on everything from smartphones to wearable devices to driverless cars.
Our company is operating well today, but we think we can make it cleaner and more accountable. Google and the other new subsidiaries of Alphabet will report separately to investors, which is surely part of the increased accountability.
Alphabet and the new structure will be phased in over the next few months, with the new company reporting its results for the first time under the new name and structure beginning with the fourth quarter earnings release in January. Google shareholders will automatically convert to Alphabet shareholders, but the stock will continue to trade under the same GOOG and GOOGL ticker symbols.
Investors reacted positively to the news, sending the stock up more than 6 percent in after-hours trading.
sosurces: gizmag.com; c/net.com; cnn.com; huffingtonpost.com