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Alphabet Inc.
Company typePublic
IndustryConglomerate
FoundedOctober 2, 2015; 9 years ago (2015-10-02)
Founders
Headquarters
Mountain View, California
,
United States
Key people
Eric Schmidt
(Executive Chairman)
Larry Page
(CEO)
Sergey Brin
(President)
Ruth Porat
(CFO)
Products
RevenueIncrease US$74.98 billion (2015)[1]
Increase US$19.36 billion (2015)[1]
Increase US$16.34 billion (2015)[1]
Total assetsIncrease US$147.46 billion (2015)[1]
Total equityIncrease US$120.33 billion (2015)[1]
Number of employees
64,115 (Q1 2016)[2]
Subsidiaries
Websiteabc.xyz
Footnotes / references
[3]

Alphabet Inc. (commonly known as Alphabet, and frequently informally referred to as Google) is an American multinational conglomerate created in 2015 as the parent company of Google and several other companies previously owned by Google.[4][5][6][7][8] The company is based in Mountain View, California and headed by Google's co-founders, Larry Page and Sergey Brin, with Page serving as CEO and Brin as President.[9] The reorganization of Google into Alphabet was completed on October 2, 2015.[10] Alphabet's portfolio encompasses several industries, including technology, life sciences, investment capital, and research. Some of its subsidiaries include Google, Calico, GV, Google Capital, X, and Google Fiber. Some of the subsidiaries of Alphabet have altered their names since leaving Google—Google Ventures becoming GV, Google Life Sciences becoming Verily and Google X becoming just X. Following the restructuring Page became CEO of Alphabet while Sundar Pichai took his position as CEO of Google.[4][5] Shares of Google's stock have been converted into Alphabet stock, which trade under Google's former ticker symbols of "GOOG" and "GOOGL".

The establishment of Alphabet was prompted by a desire to make the core Google Internet services business "cleaner and more accountable" while allowing greater autonomy to group companies that operate in businesses other than Internet services.[5][11]

History

On August 10, 2015, Google Inc. announced plans to create a new public holding company, Alphabet Inc. Google CEO Larry Page made this announcement in a blog post on Google's official blog.[5] Alphabet would be created to restructure Google by moving subsidiaries from Google to Alphabet, narrowing Google's scope. The company would consist of Google as well as other businesses including X, Google Capital, and GV.[9][12][13] Sundar Pichai, the then Product Chief, became the new CEO of Google, replacing Larry Page.[14][15]

In his announcement, Page described the planned holding company as follows:[5][16]

Alphabet is mostly a collection of companies. The largest of which, of course, is Google. 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. […] Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.

As well as explaining the origin of the company's name:

We liked the name Alphabet because it means a collection of letters that represent language, one of humanity's most important innovations, and is the core of how we index with Google search! We also like that it means alpha‑bet (Alpha is investment return above benchmark), which we strive for!

Page says the motivation behind the reorganization is to make Google "cleaner and more accountable." He also said he wanted to improve "the transparency and oversight of what we’re doing," and to allow greater control of unrelated companies.[5][11]

On February 1, 2016, Alphabet Inc. surpassed Apple to become the world's most valuable publicly traded company until February 3, 2016, when Apple surged back over Alphabet to retake the position.[17][18]

Website/Domain

Alphabet has chosen the domain abc.xyz with the .xyz top-level domain (TLD), which was rolled out in 2014. It does not own the domain alphabet.com, which is owned by a fleet management division of BMW. BMW has said that it is "necessary to examine the legal trademark implications" of the proposals. It also does not own abc.com, which is the promoted domain of the Disney-owned American Broadcasting Company (though abc.com redirects to a subdomain of go.com, through which most of Disney's sites are hosted).[19][20]

The website features an easter egg in the paragraph where Larry Page writes, "Sergey and I are seriously in the business of starting new things. Alphabet will also include our X lab, which incubates new efforts like Wing, our drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure." The full stop after "drone delivery effort" is a hyperlink to "hooli.xyz", a reference to the television series Silicon Valley.[21]

Structure

Alphabet Inc. company structure

Alphabet's largest subsidiary is Google Inc., but Alphabet is also the parent company to Calico, GV, Google Capital, X, Google Fiber, Jigsaw, Sidewalk Labs, and Verily. While many companies or divisions formerly a part of Google became subsidiaries of Alphabet, Google remains the umbrella company for Alphabet's Internet-related businesses. These include many of the most iconic products and services long associated with Google, such as the Android mobile operating system, YouTube, and Google Search, which remain direct components of Google Inc. and were not made subsidiaries of Alphabet.[9][22]

Proposed growth

Eric Schmidt said at an Internet Association event that there may eventually be more than 26 Alphabet subsidiaries. He also said that he was currently meeting with the CEOs of the current and proposed Alphabet subsidiaries. He said, "You'll see a lot coming."[23]

Restructuring process

Alphabet was created as a subsidiary directly owned by Google Inc. The roles of these two companies – one as the owner and the other as the subsidiary – was then reversed in a two-step switch. First, a dummy subsidiary of Alphabet was created. Then Google merged with that dummy subsidiary while converting Google stock to Alphabet stock. The post-merger subsidiary, no longer a dummy, changed its name to "Alphabet Inc." Under Delaware law, a holding company reorganization such as this can be done without a vote of shareholders, as this reorganization was.[24]

The restructuring process was completed on October 2, 2015.[10] Alphabet retains Google Inc.'s stock price history and continues to trade under Google Inc.'s former ticker symbols "GOOG" and "GOOGL;" both classes of stock are components of major stock market indices such as the S&P 500 and NASDAQ-100.

References

  1. ^ a b c d e "Alphabet Inc. 2015 Annual Report Form (10-K)". EDGAR. United States Securities and Exchange Commission. February 27, 2016. Retrieved December 21, 2015.
  2. ^ "Alphabet Announces First Quarter 2016 Results". Alphabet.
  3. ^ "Alphabet Inc. Annual Reports". Alphabet Inc. January 28, 2016. Retrieved August 29, 2014.
  4. ^ a b "Google to be part of new holding company, 'Alphabet'". Retrieved August 11, 2015.
  5. ^ a b c d e f Page, Larry. "G is for Google". Google Official Blog. Retrieved August 11, 2015.
  6. ^ "Google creates new parent company called Alphabet – CNET". CNET. Retrieved September 19, 2015.
  7. ^ Reuters (October 2, 2015). "Bye bye Google, hello Alphabet". The Express Tribune News Network. The Express Tribune. Retrieved October 14, 2015. {{cite news}}: |last1= has generic name (help)
  8. ^ "Bye bye Google, hello Alphabet". Saudi Gazette. October 3, 2015. Retrieved October 14, 2015.
  9. ^ a b c Womack, Brian (August 10, 2015). "Google Creates New Company Called Alphabet, Restructures Stock". Bloomberg. Retrieved August 10, 2015.
  10. ^ a b "SEC Filing (Form 8-K) by Alphabet Inc". October 2, 2015.
  11. ^ a b Metz, Cade. "A New Company Called Alphabet Now Owns Google". Wired. Condé Nast. Retrieved August 13, 2015.
  12. ^ Greenberg, Julia (August 10, 2015). "What Google, I Mean Alphabet, Looks Like Now". Wired. Condé Nast. Retrieved August 10, 2015.
  13. ^ "What is Alphabet, Google's new company?". Business Insider. Retrieved August 10, 2015.
  14. ^ Chen, Angela (August 10, 2015). "Google Creates Parent Company Called Alphabet in Restructuring". Wall Street Journal. Retrieved August 10, 2015.
  15. ^ Conor Dougherty (August 10, 2015), Google to Reorganize in Move to Keep Its Lead as an Innovator, New York Times, retrieved August 10, 2015
  16. ^ "Google's Larry Page explains the new Alphabet – CNET". CNET. Retrieved September 19, 2015.
  17. ^ Levy, Ari. "Google passes Apple as most valuable company". CNBC. NBCUniversal. Retrieved February 1, 2016.
  18. ^ Krantz, Matt. "Apple not going down easy as it overtakes Google parent Alphabet". USA Today. USA Today. Retrieved February 3, 2016.
  19. ^ Davidson, Lauren. "Google unveils Alphabet... but that's already trademarked by BMW". Daily Telegraph. Retrieved August 12, 2015. {{cite web}}: Italic or bold markup not allowed in: |website= (help)
  20. ^ Lardinois, Frederic (August 10, 2015). "Google Is Now Alphabet, But It Doesn't Own Alphabet.com". TechCrunch. AOL Inc. Retrieved August 11, 2015.
  21. ^ David Stubbs (August 12, 2015). "Google's hooli.xyz Easter egg proves Silicon Valley is tech's own Spinal Tap". The Guardian. Retrieved February 28, 2016.
  22. ^ "Google's new Alphabet, from A to Z (pictures) – CNET". CNET. Retrieved August 12, 2015.
  23. ^ Bergen, Mark. "Eric Schmidt: Get Ready for 'a Lot' More Alphabet Companies". Re/code. Re/code. Retrieved October 19, 2015.
  24. ^ "Google Inc. filing with the SEC, Form 8-K". United States Securities and Exchange Commission. August 10, 2015. Retrieved August 11, 2015.
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