Larry Page just dropped a bomb on the tech community, saying that Google will now be part of a collection of companies called Alphabet, which Page and Sergey Brin will run. (Fortune did once call him the most ambitious CEO in the universe)
Meanwhile, Sundar Pichai, the former Google senior vice president of product, will step up to become the CEO of Google, which will be the largest company in Alphabet. Google will retain search, ads, Google Maps, apps, YouTube, Android and cloud infrastructure, according to the SEC filing. The rest of Alphabet will be made up of other Google units not related to its massive search business. Those include Calico, Google’s health and longevity effort; Nest its connected home business; Fiber, its gigabit internet arm; and its investment divisions such as Google Ventures and Google Capital, and incubator projects, such as Google X. These will be managed separately in Alphabet. From the blog post reporting the structural shift:
In many ways this insulates Google from the risks and craziness of the moonshots that Google take on a regular basis, while also putting someone (Pichai) accepted by the tech community and Wall Street in charge of the main line of Google’s business. However it’s unclear exactly how all of this works out in practice, since Google’s phenomenally successful ad revenue pays for its R&D into things like its efforts to build self-driving cars or gigabit fiber internet access for the U.S.
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, though the two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG.
Want more coverage? See some of Fortune’s other Alphabet stories:
• Bad news for Google parent Alphabet: The “G” will still foot the bill
• Here’s what Twitter thinks about Google becoming Alphabet
• Google shares jump 5% on bombshell CEO and restructuring news
• Google is now Alphabet, but it doesn’t own the dotcom URL