Google Inc. on Monday announced a new parent company called Alphabet. In a major shake-up at the company co-founder Larry Page announced the new company in a blog post.
Alphabet will contain subsidiaries to separate its core web advertising business from newer ventures like autonomous vehicles, and life-sciences projects.
According to Michael Yoshikami, head of Destination Wealth Management, “It suggests that in all likelihood, Google is not going to slow the pace of their experimental processes like self-driving cars. It suggests they’re really going to try to be like a tech conglomerate combined with VC.”
Google shares were up 7 percent in after-hours trading to $708.
Alphabet Inc will replace Google 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.
“This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google,” Larry Page said in a blog post.
The new structure will place Sundar Pichai in charge of Google, while new CFO Ruth Porat will control the financials for Alphabet and Google.
Pichai most recently served as the company’s senior vice president of products.
Google’s directors will become directors of Google while each company under the parent firm will have its own CEO.
Google co-founder Sergey Brin will become president of Alphabet, and Eric Schmidt will be executive chairman.
Page said “Alphabet is mostly a collection of companies, the largest of which is, of course, Google.”
The surprising change will take place later this year.