Google was only Larry Page's first proof-of-concept. Google will now restructure its operations into a General Electric-like conglomerate called Alphabet, of which the search company will become just one division.
Google pioneered what has become the archetype of the modern Silicon Valley company — an engineering-driven culture in which internal hierarchies are suppressed, empirical evidence is prized and people are given wide leeway to work on problems that excite them, even if they seem far removed from a central corporate mission.
Now, by creating a formal structure to enshrine the goal of working on far-ranging problems, Google (or, rather, Alphabet) is offering a template for the next evolution of a modern tech firm — one that can do a lot more in many different corners of the world, for better or for worse.
From Larry Pages letter introducing Alphabet
We did a lot of things that seemed crazy at the time. Many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome, and Android. And we haven’t stopped there. We are still trying to do things other people think are crazy but we are super excited about.
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.
Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President.
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. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.
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.