Daily Report: Google Remakes Itself as Alphabet


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In a major reinvention of one of the world’s most influential technology companies, Google announced Monday evening that it is reorganizing itself in the Berkshire Hathaway model. The new company, essentially a holding company, will be called Alphabet, and it will be run by Google co-founders Larry Page and Sergey Brin.

As for the company we have come to think of as Google, the one with the search engine, maps, the Android operating system and YouTube, that will still be called Google — so people will not need to find a new word when they search for information on the Internet. Google will be run by Sundar Pichai, who has been Google’s senior vice president in charge of products.

In a blog post, Mr. Page said they picked the name Alphabet because it “means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search!” It will include companies “that are pretty far afield” from the main Internet products, like Calico, the life sciences effort; the Google Capital and Google Ventures investment arms, and Google X, the company’s big-thinking lab that’s working on things like self-driving cars and drones.

Shares of Alphabet — to keep things simple or to make them more confusing, depending on your viewpoint — will still trade under the letters GOOG and GOOGL.

The rethinking of the Mountain View, Calif. company acknowledges what many big tech companies are today — a collection of products and services, some wildly profitable, some not, gathered under one roof. Facebook, for example, isn’t just Facebook; it is also Instagram and WhatsApp and Oculus, the virtual reality company acquired last year for $2 billion.

Hewlett-Packard, which split off its medical instruments business years ago, was a forerunner of the tech conglomerate dabbling in many businesses. Now it’s cleaving itself again, with plans to split into one company focused on big “enterprise” technology and another on personal computers, servers and a more mainstream customers.

But perhaps no tech company has ever proposed such a dramatic change while it dominates large swaths of the industry.

Up the road in San Francisco, another sort of corporate drama is unfolding. To say Jack Dorsey is “pulling a Hamlet” by splitting time between Twitter and the other company he co-founded, Square, is adding a bit of Shakespearean finery to what looks more like a Marx Brothers movie.

In case you missed the news of recent weeks, Dick Costolo, Twitter’s embattled chief executive, stepped down July 1. Mr. Dorsey, a co-founder, chairman, and first chief executive of the company, stepped in as the temporary C.E.O. and has behaved like anything but, making management changes, bluntly telling investors what’s wrong with his company on an earnings call, and generally behaving like someone who doesn’t also have a day job.

Mr. Dorsey’s day job is running another outfit, Square, a payments company headquartered down a San Francisco street from Twitter that, according to reports, recently filed paperwork with the Securities and Exchange Commission for an initial public offering. So far, Mr. Dorsey says he is committed to Square.

Yet…Twitter. Mr. Dorsey, 38, hasn’t exactly ruled out taking the chief executive job if it is offered to him. On Monday, he made the classic “I believe in this company and so should you” statement by buying more than 31,000 Twitter shares. A pittance compared to his 22 million stake, but still an $875,000 statement. Several other board members also bought shares, and investors appeared to like the “we believe” signal. The price of Twitter shares ended the day up 9 percent.

Notably, Mr. Dorsey also owns 26 percent of Square, according to recent filings. Its shares are not yet being traded on public markets.



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