Everything you need to know about Google Alphabet

It’s hard to believe that it’s been almost 20 years since Google was first conceived as an idea — its origin can be traced back to a humble beginning as a research project that was conjured up in January 1996 by the minds of co-founders Larry Page and Sergey Brin when they were students at Stanford University.

Ten years later, in 2006, Google even secured a spot for itself in the Oxford English Dictionary.

This week, the Google team announced the next step in their plans for the company — that they’re officially making some changes to how Google will be structured. Given how fast news travels on the Internet these days, you might have seen some buzz circulating on social media about “Alphabet” and how it relates to Google. So, what is Alphabet anyway, and what’s going on? Here’s what you need to know:

What is Alphabet?

“Alphabet is mostly a collection of companies. The largest of which, of course, is Google,” Google CEO and co-founder Larry Page wrote in a blog post. “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 be the new parent holding company of Google and several other subsidiaries — such as Google X, Calico and Nest Labs. Page and Brin will assume the roles of CEO and President of Alphabet, respectively, while Sundar Pichai will be instituted as the new CEO of Google. In a sense, Alphabet is basically going to be the new company in charge of Google and all its other subsidiaries — and each of them will likely have their own CEO and unique management structure.

Why is this happening?

“Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related,” Page wrote. The New York Times offers a more specific analysis, calling the move “the most significant step by a Silicon Valley giant to get a handle on the sprawl of businesses that it has entered, an issue that increasingly afflicts other technology companies like Facebook and Amazon.” As the Times‘ Conor Dougherty explains, it’s a way for tech giants to organize all the spin-off business they’ve created under one umbrella.

While the Alphabet news might be a surprise to some, this is apparently a change that has been in the works for a while now. It’s likely that the restructuring is an attempt to differentiate the more mainstream aspects of Google from some of its other acquisitions — like research and development. Per Page’s announcement, the “newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead.”

What does this change mean for us?

Not much, unless you play the stocks—and even then there’s not going to be a big difference. “Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights,” Page said. In other words, nothing is really going to change on that front either.

Anything else we should know?

At its core, this won’t really change anything _ but on the other hand, it’s still encouraging to know that this Google team still has a sense of humor. Fans of the HBO show Silicon Valley were likely pleased to encounter a small Easter egg within the official Google/Alphabet blog announcement with a hidden link to Hooli, the fictional search engine on the show. (Even better? The link actually works!)

Truthfully, we’re not the only ones working through this change — Page admitted that when it comes to Alphabet, they’re still getting used to the name too.

[Featured image iStock]


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