In a significant restructuring of the company, Google has appointed Sundar Pichai as its new CEO. Larry Page and Sergey Brin (Google’s co-founders), have shifted themselves to a larger holding company called Alphabet.
Page is the CEO while Brin will be the President of Alphabet, which will oversee Google as well as affiliated companies like Calico (aiming to extend human life), Wing (drone delivery), Google’s early stage funding operations like Ventures (which recently funded Pakistani owned startup Vida) and Capital.
Pichai and Google will handle search, ads, maps, the Google Play Store, YouTube, and Android.
In addition to the managerial shakeup, the restructuring involves moving finances around as well. Google’s shares will now be traded as shares of Alphabet holding company. Investors have welcomed the news and shares were up by more than 4% after the announcement, which came in a blog post by Page.
We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.
Sundar Pichai previously handled Chrome OS and Android and was starting to play an ever increasing role in handling Google’s day-to-day operations. Talking about the choice for new Google CEO, Page said:
It is clear to us and our board that it is time for Sundar to be CEO of Google. I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations.
Google has been the subject of criticism by investors who feel many of its ambitious ventures take away the focus from its core operations. This move hands the controls of traditional offerings to Pichai and Google while the ambitious moonshots will be handled by Alphabet. How it plays out remains to be seen.