He also has a Master of Science from
Stanford University and a Master of Business Administration from the Wharton
School of the University of Pennsylvania.
“Our company is operating well today,
but we think we can make it cleaner and more accountable,” said a statement
from Page, who co-founded the tech giant with Sergey Brin 17 years ago.
“So we are creating a new company,
called Alphabet. I am really excited to be running Alphabet as CEO with help
from my capable partner, Sergey, as president.”
Eric Schmidt, the executive chairman
at Google, will transition to Alphabet with the same title, Google said.
Page said Alphabet is “mostly a
collection of companies,” the largest of which is Google.
Under the new structure, “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.”
Alphabet will include units focusing
on life sciences products, such as a glucose-sensing contact lens, and the
health research firm Calico, Page said.
Google X, which handles research on
self-driving cars and Internet balloons, will also be a separate unit.
Other units to be separated include
the drone delivery project Wing, Google Fiber’s high-speed Internet, the home
automation unit Nest and the investment arms of the California technology
giant.
“Fundamentally, we believe this allows
us more management scale, as we can run things independently that aren’t very related,”
he said.
– Strong leaders, independence –
“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,” Page said in his blog post.
Alphabet Inc. will replace Google Inc.
as the publicly traded entity, and all shares of Google will automatically
convert to shares of Alphabet, with all of the same rights, Page said.
The new operating structure “will be
introduced in phases over the coming months,” according to Google’s regulatory
filing with the Securities and Exchange Commission, and will mean separate
financial statements from the Google unit and its parent.
Google will become a wholly-owned
subsidiary of Alphabet. The Google unit will include the search engine, search
ads, maps, apps, YouTube, Android and related technical operations, according
to the filing.
The reorganization comes amid concerns
that Google’s dominance of the tech sector may have peaked as the landscape
evolves.
Google has for years been the leader
in Internet search and has turned advertising linked to those searches into a
highly lucrative business.
But its shares have struggled since
hitting an all-time high in early 2014 and it has little to show for ventures
in other areas: self-driving cars, Google Glass, Internet balloons, health
care, Google TV, mobile payments, home automation and its Google+ social network, among others.
“This is a pretty assertive move on
their part,” said Bob O’Donnell, who heads the consultancy TECHnalysis
Research.
“There have been a lot of questions
about their ability to grow outside of search. Search has been their cash cow
for a long time.”
The new structure means that each of
the projects, including “wacky” ones, would have to stand on their own and
produce results, O’Donnell said.
“There has been a sense they need to
be more serious about these things,” he told AFP.
Trip Chowdhry at Global Equities
Research called the move “very positive” because it increases transparency for
investors.
Under the new structure, “you as an
investor can now see clearly how the core business is performing, what kind of
margins they are getting, and also keep an eye on what new innovations are
happening,” Chowdhry told AFP.
Greg Sterling of Opus Research said on
the Search Engine Land blog that the strategy was not entirely clear.
“There’s a good deal of
head-scratching going on right now around the Internet” about the change, he
said.
“However it appears to be an effort by
Page and Brin to remove themselves from daily Google operations and focus on a
wider range of projects at a higher level. Page said this will allow him and
Brin to get ‘more ambitious things done’ and ‘take the long term view.'”
