Google Co-Founders' Exit Marks 'End of an Era'

Google co-founders Larry Page and Sergey Brin stepped aside from their duties at parent company Alphabet on Tuesday in a move that analysts say marks “the end of an era.”

The surprise shakeup, which elevates Google CEO Sundar Pichai as Alphabet’s CEO, raises inevitable questions about Alphabet’s future. The holding company was spawned four years ago in an effort to create more focused businesses units.

The main search business, Google, operated within its own bucket. Meanwhile, other companies, such as self-driving car company Waymo, investment arm GV, and urban planning company Sidewalk Labs, were placed in separate units under Alphabet.

Patrick Moorhead, principal analyst at Moor Insights & Strategy, said that the departure of the co-founders may signal that change is coming to Alphabet’s structure.

“What I’m wondering is with Pichai taking the helm, does this call into question the holding company arrangement?” he said. “I think it could.”

Page and Brin, who was an Alphabet president, have both been largely absent from the day-to-day operations over the past year, according to various reports. Page, who was once called “the most ambitious CEO in the universe,” has been rarely seen in public in recent years while suffering from a voice problem.

In a letter, Page and Brin said that having Pichai serve as CEO of both Google and Alphabet wouldn’t have any impact on Alphabet, and that it’s “the natural time to simplify our management structure.”

“We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President,” they wrote.

Daniel Ives, an analyst at Wedbush Securities, said that the timing of their departures “will raise more questions around the company’s future strategy.” But he said that the timing makes sense.

“It’s the end of an era with Larry leaving the keys to the house with Sundar,” he said, of Page relinquishing his CEO title. “It’s a natural time for Larry and Sergey to leave since the current restructuring of Alphabet, which started four years ago.”

Investors had a muted reaction to the news. Shares in Alphabet nudged up only a half percent to $1,292.38 in extended trading, after the announcement Tuesday afternoon.

Ivan Feinseth, director of research at Tigress Financial Partners, said that Pichai is a good choice to take over Alphabet. Under his leadership, the company has been “on the forefront of every key secular tech trend: cloud, mobile, search, advertising, including investing in a lot of emerging technologies.”

“It’s always been expected that eventually Pichai would take more and more responsibility,” he said.

Additionally, Feinseth pointed to Alphabet’s recent stock performance. Its shares are near an new all-time high.

While it feels like the end of an era for one of the most powerful companies of the past two decades, Brin and Page say they are still committed to keeping up with the latest at Alphabet. Both will remain on Alphabet’s board.

“We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as board members, shareholders and co-founders,” they wrote. “In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!”