The A-Z about Alphabet Inc.
Post By Saksham Garg on 14-August-2015
The internet has been flooded with the news of Alphabet Inc. buying the tech giant Google recently. What is Alphabet Inc. and how could a company that no one heard of till now manage to buy Google? How would this change the way we see and use Google?
Alphabet Inc. is a holding company that is intended to become a conglomerate that will directly own several companies that were owned by or tied to Google, including Google itself. It will be headed by the founders of Google, Larry Page and Sergey Brin. The separate projects under Google, like Calico, Google X, etc will become separate organisations each with a CEO, each of whom would be answerable to the CEO of their parent company, Alphabet Inc. This business design took inspiration from Warren Buffett's Berkshire Hathaway (BRKA). Larry Page is known to be a huge admirer of Buffet’s managing style.
Google would now be headed by Sundar Pichai, who joined in 2004, where he led the product management and innovation efforts for a suite of Google's client software products, including Google Chrome. Since then he came to head all products under Google, except YouTube. Pichai did his BTech in Metallurgical Engineering from IIT Kharagpur, M.S. from Stanford University and finally M.B.A. from Wharton School of the University of Pennsylvania.
The reason behind this structural redesign was to give each business more freedom and independence to grow as well as make the company cleaner and more accountable. Projects like Calico (age-fighting biotech company), Google X (the experimental one), Nest (smart home company) and many more Google ventures are hardly related to Google’s core search business. So it made sense to continue these further as distinct companies in order to better research and development as well as to appease the investors. Turns out they are appeased as Alphabet shares are 6% up since the announcement.
P.S. (I should start calling it the ‘why-is-it-named-so section’): A mixture of terrible jokes, grand ambition, and carefully studied banality gave birth to this name. The pun comes from the fact that “alpha” is a financial term meaning return on investment above the benchmark, making Alphabet a good ‘Alpha-bet’. You can go read more about Alphabet Inc. on
www.alphabet.com. I mean abc.xyz, since the domain alphabet.com belongs to BMW, who refused to sell it to Google. And so Google came up with a way cooler domain.