Google surprised the world with a bombshell yesterday when it announced that it would be forming a holding company called Alphabet with Google now becoming just one of the business units within the company.
According to media reports, industry analysts are generally reacting positively to the news with many feeling that it will provide more financial transparency in to Google’s lesser known units like the secretive Google X labs.
The new structure is also expected to engender more financial responsibility to a company that has at times been criticized for getting carried away with its creative zest.
“In addition, with this new structure we plan to implement segment reporting for our Q4 results, where Google financials will be provided separately than those for the rest of Alphabet businesses as a whole,” said Larry Page.
From an advertiser perspective, nothing much seems to have changed. The ads division, along with search, YouTube, Android and apps, will all remain together under Google, which is now being headed by Sundar Pichai. This division will be the largest under the new structure and the one that will provide the main revenue for the overall group.
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. Google will become a wholly-owned subsidiary of Alphabet. “Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG,” said Page.