As the name implies, it could be anything and everything, but Alphabet is a major something in the evolution of Google.
Google’s move to create a new holding company represents a shift at the tech behemoth that has been building for several months. On Monday, Google announced the plan which includes a new CEO for Google, Sundar Pichai, and a move by founders Larry Page and Sergey Brin, along with Eric Schmidt, to the helm of the holding company.
The name of the new holding company, Alphabet, itself is brilliant. It is a reference to anything and everything—a soup of variety—much like Google GOOG had become with its multitude of businesses and simmering new ideas.
But there’s another reference as well: Alphabet is a great stand-in for Alpha Bet. In investment lingo, “alpha” is what professional managers strive for: excess risk adjusted performance. Alpha is also often used in everyday contexts as a synonym for leader.
The shift to Alphabet isn’t, of course, merely a name change—nor is it simply a reorganization. The move represents the next step in Google’s journey toward becoming a more financially and managerially disciplined company. In March, Ruth Porat joined the tech giant from Morgan Stanley to become CFO of Google. She will now be CFO of both Alphabet and Google. In July, Alan Mulally, the former CEO of Ford, joined the board and its audit committee. How much the Alphabet shift will improve transparency to shareholders remains to be seen.
On the managerial front, the new structure comes amid Google’s failure to win over EU antitrust regulators. And it follows the messy litigation involving Google related to agreements to not hire workers from rival firms.
The restructuring is especially interesting because with its far flung businesses and business ideas, in recent years, Google has resembled a collection of disparate enterprises like you might see within a single mutual fund but with a major difference: The company sits outside that specialized statutory structure, as Warren Buffet’s Berkshire Hathaway does.
And the similarities between mutual funds and firms like Alphabet and Berkshire are growing. Increasingly, mutual funds are holding private companies as part of their portfolios.
Following the financial crisis, I argued that regulators should look into whether or not the mutual fund rules and current accounting rules were appropriately structured given the growing presence of firms like Berkshire Hathaway brk.a , which get a pass from daily net asset value calculations and other requirements. Although it does not appear that this particular issue is top of mind for regulators just now, shadow financial firms that operate outside the standard formats, in both credit and investment markets, should be receiving even more wide-ranging attention than they have been. When firms appear to look less like large companies and more like large funds, it’s time to have a conversation on what they are: animal, mineral, or a whole new set of ABCs.
Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (http://www.thevaluealliance.com), an independent board education and advisory firm she founded in 1999. She has been a regular contributor to Fortune since April 2010 and is the author of two books on corporate governance and valuation.