A New Take on the Alphabet

alphabet-structure By this point, you’ve probably read about Google’s dramatic announcement that it would be merging with a new parent company called Alphabet, Inc. And yet many are still confused as to what this actually means. Some ask, “why would Google change its name,” or “what made Google change its structure so abruptly?” In a disorganized age of information overload, it can be difficult to find the answers you’re looking for. Here are a few basic answers to common questions about Alphabet, Inc.

Alphabet, Inc. is a holding (parent) company. Within this parent company will sit Google and Google’s subsidiaries, such as maps, ads, and YouTube. Alphabet, Inc. will not directly make or sell any products; so, it really does function like one large umbrella under which Google’s subsidiaries are housed. Larry Page, one of Google, Inc.’s co-founders will serve as the Alphabet, Inc. CEO and Sergey Brin, Google, Inc.’s other co-founder, will serve as president. Sundar Pichai will become the CEO of Google, Inc.

So of course, many are asking why Google would make such a drastic change. The main reason lies in Google’s acquisition of multiple smaller companies like Deja, Outride, Kaltix, ZipDash, and the list goes one. Moreover, the merger allows Google better ways allocate resources to some of their larger projects under search, Android, and Google Auto. Think with Google is an entire digital innovation lab.

Fortunately, if you currently own Google, Inc. shares, you can continue to trade stock under the GOOG and GOOGL ticker symbols on the NASDAQ. After the merge is complete and finalized sometime next year, your current stocks will be rebranded as Alphabet stock, retaining value and price history. Although a bit complex, the Alphabet umbrella company will contain Calico, Google x, Fiber, Google Ventures, Google Capital, Nest, and simply Google.

As Google continues to expand, we can only expect more structural and branding changes along the way. While it may be difficult to understand at times, at least there’s always something interesting to look out for.