Located in Mountain View, California, Alphabet Inc. is a holding company for an American international technological giant. It was established on October 2, 2015, as a result of Google's reorganization, and it now serves as the parent company of Google and numerous former Google subsidiaries. One of the most valuable corporations in the world, Alphabet is the third-largest technology firm in terms of sales. Along with Microsoft, Apple, Amazon, and Meta, it is one of the Big Five American technological firms.
The creation of Alphabet Inc. was motivated by a desire to give group firms with activities outside of Internet services more autonomy while making the core Google company "cleaner and more responsible." In December 2019, the company's founders, Larry Page and Sergey Brin announced their retirement from their leadership positions. Sundar Pichai, also the CEO of Google, will take over as CEO. Alphabet Inc. continues to employ Page and Brin and has them on its board and as its majority owners.
History:
Google Inc. announced plans to establish Alphabet Inc. as a new public holding company on August 10, 2015. This disclosure was made by Google CEO Larry Page in a blog post on Google's official blog. To streamline Google's operations and reduce its overall scope, Alphabet would be established. Google would be a part of the company, along with X Development, Calico, Nest, Verily, Fiber, Makani, CapitalG, and GV. Sundar Pichai, the company's product chief, succeeded Larry Page as Google's CEO. Larry Page and Google co-founder Sergey Brin moved up to lead Alphabet.
The proposed holding company, according to Page's announcement, would enable "more management scale, as we can run things independently that aren't very related" to Google. According to him, Google would be "a bit slimmed down" as a result of the new holding company, with the businesses that are "pretty far afield from our main internet products contained in Alphabet instead." He added that improving "the transparency and oversight of what we're doing" and "making Google cleaner, more accountable, and better" were the driving forces behind the reorganization.
At the conference in 2017, former executive and current technical advisor Eric Schmidt revealed that Warren Buffett and the management structure of Berkshire Hathaway from a decade earlier served as the model for this structure. According to Schmidt, he urged Page and Brin to meet with Buffett in Omaha to learn how Berkshire Hathaway operated as a holding company for subsidiaries with capable CEOs who were trusted to run their companies.
Google Inc. was initially set up as Alphabet's owner before it changed to being a subsidiary of Alphabet. After a placeholder subsidiary for Alphabet's ownership was established, the roles were switched and the recently formed subsidiary was merged with Google. The stock of Google was subsequently changed to that of Alphabet. A holding company reorganization like this one is permissible under the Delaware General Corporation Law (where Alphabet is incorporated), and this reorganization was done without a shareholder vote. The reorganization was finished on October 2, 2015. Both classes of shares are parts of significant stock market indexes including the S&P 500 and NASDAQ-100, and Alphabet continues to trade under the old ticker symbols "GOOG" and "GOOGL" that were formerly used by Google Inc.
Page and Brin jointly stated on December 3, 2019, that they will stand down from their respective positions but continue to work for the company and continue to hold the majority vote on the board of directors. Google's CEO, Sundar Pichai, kept his position at Google while also taking up the CEO position at Alphabet.
In the middle of 2022, the company divided its equity.
In a letter dated January 20, 2023, Pichai informed every employee that the business will be eliminating 12,000 positions, or 6% of its worldwide workforce. Pichai stated, in the letter, "Periods of significant increase have been seen over the previous two years. We recruited for a different economic reality than the one we now confront to match and drive that development."
Structure:
In addition to its major company, Google, Alphabet Inc. also has several other companies in a variety of different sectors, including:
To be valued and legally isolated from Google, starting on September 1, 2017, their stock is owned by a subsidiary known as XXVI Holdings, Inc. (corresponding to the Roman numeral 26, the number of letters in the alphabet). Google's reorganization as Google LLC, a limited liability corporation, was also disclosed at the same time.
At an Internet Association event in 2015, Eric Schmidt predicted that there would ultimately be more than 26 Alphabet companies. Additionally, he said that he was present in meetings with the CEOs of Alphabet's existing and potential companies. You'll see a lot coming, he added.
Although several businesses or divisions that were originally a part of Google became subsidiaries of Alphabet, Google continues to serve as the parent organization for all Internet-related businesses of the corporation. These include popular goods and services that have been closely linked to Google for a long time, such as the Android mobile operating system, YouTube, and Google Search, all of which are still core parts of the company.
Nest Labs, which Google acquired in February 2018, and Chronicle, which Google Cloud acquired in June 2019, are examples of former subsidiaries. Following CEO Daniel L. Doctoroff's resignation from the business due to a potential ALS diagnosis in 2021, Sidewalk Labs was merged with Google.
Alastair Westgarth, the CEO of Loon LLC, said in a blog post in January 2021 that the firm would be closing due to a lack of a scalable and viable business plan. X's spinoff, Intrinsic, a new robotics software business, was launched by Alphabet in July 2021. Isomorphic Labs, a new organization led by DeepMind CEO Demis Hassabis and using artificial intelligence for drug research, was unveiled by Alphabet in November 2021.
Corporate identity:
In a 2018 speech, Schmidt said that the name's initial source of inspiration was the street address of the former Google Hamburg headquarters, ABC-Straße [de].
With the 2014-introduced.xyz top-level domain (TLD), Alphabet has selected the domain ABC. XYZ. The domain alphabet.com is held by a BMW fleet management subsidiary and is not owned by it. BMW said that it will be "essential to analyze the legal trademark consequences" of the ideas after the unveiling. Furthermore, it is not the owner of the American Broadcasting Company's (ABC) domain, which is held by Disney.
In the sentence where Larry Page writes, there is an Easter egg on the website "Serguey and I take launching new ventures very seriously. The X lab, which develops innovative projects like Wing, our drone delivery initiative, will soon be a part of Alphabet. As a result of this new structure, we are also excited about expanding our investment divisions, Ventures, and Capital." Drone delivery endeavor is followed by the phrase "hooli. XYZ," which is a reference to Silicon Valley on television.
Finances:
Alphabet said that its net income for the fiscal (and calendar) year 2021 was $76.033 billion. The yearly revenue increased by 41% over the prior fiscal year to $257.6 billion.
According to Alphabet's 2017 annual report, brand advertising and performance advertising accounted for 86% of the company's sales. From its overseas activities, 53% of these came about. Accordingly, the total revenue in 2017 was US$110,855 million, and there were US$12,662 million in net profits.
Up until February 3, 2016, when Apple retook the top spot, Alphabet Inc. had overcome Apple to hold the title of the most valuable publicly listed corporation in the world. The lackluster result was attributed by experts to Apple's lack of innovation as well as growing Chinese competition.
According to the Fortune 500 list of the top American firms by total revenue, Alphabet is rated No. 15 as of 2019.
Alphabet joined the exclusive club of $1 trillion market value firms on January 16, 2020, becoming the fourth US corporation to do so.
With fewer revenues in almost a decade, Alphabet saw its worst quarterly growth in October 2022. The potential global recession, a high US currency, and pandemics were all factors in the economy's slowdown.
Investments and acquisitions:
Investments:
UnitedMasters, a music firm created by Steve Stoute, received a $71 million Series A funding round from Alphabet Inc., Andreessen Horowitz, and 20th Century Fox in November 2017.
Alphabet invests in more established businesses as well as startups, including privately owned businesses like Medium and publicly listed firms like Uber.
Acquisitions:
According to a study of the company's investments in 2017, it outperformed Intel Capital and its greatest client by being the most active investor during that time. In the 2017 fiscal year, Cisco came in second behind Alphabet, Inc. with the acquisition of seven of the company's own capital-backed firms.
