What's going on with Google?

By Isabelle Bell

11 August 2015

Google surprised the business world yesterday with the announcement that it is creating a new parent company – Alphabet Inc – as part of a restructure. But what does it all mean, and why is the tech giant doing this?

Why is Google restructuring?

The shakeup will mean that many of Google's business ventures will now be organised underneath the holding company – and run as separate businesses. Google's co-founders Larry Page and Sergey Brin have said that setting up Alphabet is part of a plan to be "cleaner and more accountable", which has seen them "slim down" the business.

Importantly, Alphabet has been set up to allow Google to focus on some of its more ambitious projects – such as its driverless cars and cancer-detecting wristbands.

The industry believes that the restructure will offer more clarity on the different areas of Google's businesses, as earnings reports will be delivered for each business individually.

What is the new structure?

Google will continue to run some of its best-known businesses, such as YouTube, Google search and Android.

The rest of Google's business ventures, including some of its newer investment and research divisions, will be run as separate and independent firms under Alphabet.

These include Google's X labs – the company behind its most innovative ideas, such as weather balloons to beam internet signals to remote places in the world – and Google Ventures, its venture capital business.

Which companies will be part of Alphabet?

  • Google – Google search, Google maps, YouTube, Android and apps
  • Google X Labs – the research division behind driverless cars and internet by balloon
  • Calico – a research and development company focussed on tackling aging
  • Google Life Sciences – the company behind its smart contact lenses
  • Google Capital – an investment fund
  • Google Ventures – a venture capital business
  • Fiber – a high-speed internet company
  • Nest – a home product company

Who is in charge of Alphabet?

Google's co-founder Larry Page is stepping up to be CEO of Alphabet, with his partner Sergey Brin taking on the role of president. The now former head of Android, Sundar Pichai, has been made the new CEO of Google to replace Larry Page.

What does it mean for Google's customers?

Not much at this stage. The major products that most Google users encounter every day, such as Search and YouTube, are staying under the Google umbrella, so there should not be any change in how they run from a consumer perspective.

Source: PA News

Main image: l i g h t p o e t / Shutterstock.com


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