Search engine company Google Inc. on Monday surprised investors by announcing sweeping organisational changes, including the formation of a parent company, Alphabet, for all its subsidiaries.
Alphabet will be headed by Larry Page, Google Co-Founder and Chief Executive.
"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," said Page in Google's official blog.
The move to create a holding company is aimed at separating its core search and advertising business from other ventures such as making robots and self-driving cars, research in medicine, developing nanoparticles and projects on Internet connectivity via balloons, The Wall Street Journal reported.
Here are the key takeaways on Google's new holding company Alphabet:
1. The new parent company will be run by its top executives Chief Executive Larry Page, Co-Founder Sergey Brin and Chief Financial Officer Ruth Porat.
2. Google will become a subsidiary of Alphabet, handling search business, YouTube, Android, Chrome, Apps, Maps and Ads. It will be headed by India-born Sundar Pichai, who is currently the senior vice president of the product and engineering team at the company.
3. Each subsidiary under the new holding company will have a CEO reporting to Page. Starting from the fourth quarter in calendar year 2015, the company will announce its earnings separately for its core search business and other entities.
4. Reporting results separately will enable investors to assess the company's performance in search and advertising business and spending on other projects.
5. Google shares will be transferred to Alphabet, although the trading will continue under the same ticker.
6. Google's current chief business officer Omid Kordestani will be moved to a new role as adviser to Alphabet and Google. The company will do away with the chief business officer position and appoint Philipp Schindler to manage sales.
7. The other companies in the new group include Nest, the home automation business run by Tony Fadell; Fiber, Google's broadband internet and cable television provider and Calico, the research and development biotech company headed by Art Levinson.
8. Other entities include Google X, the company's research lab that is involved in projects such as the self-driving car; Google Ventures, its corporate venture capital investment arm; Google Capital, a fund focused on larger, growth stage technology companies and Sidewalk, a newly created urban innovation company headed by Dan Doctoroff.