Google becoming alphabet

Even in the early days of Google, cofounders Page and Sergey Brin would let their minds wander to other seemingly impossible projects beyond the already ambitious task of building a search engine to change how millions use the Internet. Nearly 17 years after founding Google, Page and Brin remain as ambitious as ever, if not more so. Yet, the day-to-day management demands of running Google, essentially an elaborate $400 billion advertising business, increasingly weighed on Page in particular.

     The high-profile structural change may offer many benefits to Google: more C-suite opportunities and autonomy to prevent promising executives from leaving; an improved organization for acquiring multi-billion-dollar businesses; more transparency for Wall Street about Google's many varied investments. Ever since Page returned to the CEO role at Google in 2011, he has been debating possible changes to the organizational structure that would allow him to maintain broad control of the business he created while nonetheless giving him more freedom to pursue new ventures (Seth Fiegerman 2015).

     Not only does the structure of Alphabet offer more appealing slots for these big new ventures to grow and potentially be spun off one day, the name change might also help protect Google proper, which is by far Alphabet's biggest money maker. As one former exec put it to us, "How can you take big swings when everything may hurt the Google brand? “Google, like many established technology companies, is also competing against the growing number of billion-dollar startups, or Unicorns, to hire and hold on to its top talent. The option to have more C-suite jobs across the company may help.

The idea seems to be to allow Google to remain focused on things related to its mission while Alphabet can expand into new areas without the burden of explaining how everything supposedly fits into Google.

Alphabet is a new company being created by the founders of Google that will take over everything currently run by Google. Call it a conglomerate or holding company, Alphabet will become the new parent of Google and for other companies like Nest that are currently owned by Google. 

Reference 

Seth, F. (2015). The inside story of why Google is becoming Alphabet now retrieved https://mashable.com/2015/08/11/google-alphabet-timing/