Alphabet Inc. is an American multinational technology
conglomerate holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
headquartered in
Mountain View, California
Mountain View is a city in Santa Clara County, California, United States. Named for its views of the Santa Cruz Mountains, it has a population of 82,376.
Mountain View was integral to the early history and growth of Silicon Valley, and is the ...
. It was created through a
restructuring
Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons ...
of
Google
Google LLC () is an American Multinational corporation, multinational technology company focusing on Search Engine, search engine technology, online advertising, cloud computing, software, computer software, quantum computing, e-commerce, ar ...
on October 2, 2015,
and became the parent company of Google and several former Google
subsidiaries.
Alphabet is the
world's third-largest technology company by revenue and one of the world's
most valuable companies.
It is one of the
Big Five American
information technology
Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of Data (computing), data . and information. IT forms part of information and communications technology (ICT). An information te ...
companies, alongside
Amazon
Amazon most often refers to:
* Amazons, a tribe of female warriors in Greek mythology
* Amazon rainforest, a rainforest covering most of the Amazon basin
* Amazon River, in South America
* Amazon (company), an American multinational technolog ...
,
Apple
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, where its wild ancestor, ' ...
,
Meta and
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washin ...
.
The establishment of Alphabet Inc. was prompted by a desire to make the core Google business "cleaner and more accountable" while allowing greater autonomy to group companies that operate in businesses other than Internet services.
Founders
Larry Page
Lawrence Edward Page (born March 26, 1973) is an American business magnate, computer scientist and internet entrepreneur. He is best known for co-founding Google with Sergey Brin.
Page was the chief executive officer of Google from 1997 unti ...
and
Sergey Brin
Sergey Mikhailovich Brin (russian: link=no, Сергей Михайлович Брин; born August 21, 1973) is an American business magnate, computer scientist, and internet entrepreneur, who co-founded Google with Larry Page. Brin was th ...
announced their resignation from their executive posts in December 2019, with the CEO role to be filled by
Sundar Pichai
Pichai Sundararajan (born June 10, 1972), better known as Sundar Pichai (), is an Indian-American business executive. He is the chief executive officer (CEO) of Alphabet Inc. and its subsidiary Google.
Born in Madurai, India, Pichai earned hi ...
, also the CEO of Google. Page and Brin remain employees, board members, and
controlling shareholders of Alphabet Inc.
History
On August 10, 2015,
Google Inc.
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. I ...
announced plans to create a new public
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
, Alphabet Inc. Google CEO
Larry Page
Lawrence Edward Page (born March 26, 1973) is an American business magnate, computer scientist and internet entrepreneur. He is best known for co-founding Google with Sergey Brin.
Page was the chief executive officer of Google from 1997 unti ...
made this announcement in a blog post on Google's official blog. Alphabet would be created to restructure Google by moving subsidiaries from Google to Alphabet, narrowing Google's scope. The company would consist of Google as well as other businesses including
X Development
X Development LLC (formerly Google X) is an American semi-secret research and development facility and organization founded by Google in January 2010, which now operates as a subsidiary of Alphabet Inc. X has its headquarters about a mile and a ...
,
Calico
Calico (; in British usage since 1505) is a heavy plain-woven textile made from unbleached, and often not fully processed, cotton. It may also contain unseparated husk parts. The fabric is far coarser than muslin, but less coarse and thick than ...
,
Nest
A nest is a structure built for certain animals to hold eggs or young. Although nests are most closely associated with birds, members of all classes of vertebrates and some invertebrates construct nests. They may be composed of organic materi ...
,
Verily
Verily Life Sciences, also known as Verily (formerly Google Life Sciences), is Alphabet Inc.'s research organization devoted to the study of life sciences. The organization was formerly a division of Google X, until August 10, 2015, when Sergey ...
,
Fiber
Fiber or fibre (from la, fibra, links=no) is a natural or artificial substance that is significantly longer than it is wide. Fibers are often used in the manufacture of other materials. The strongest engineering materials often incorpora ...
,
Makani,
CapitalG
CapitalG (formerly Google Capital) is the independent growth fund under Alphabet Inc.
Alphabet Inc. is an American multinational technology conglomerate holding company headquartered in Mountain View, California. It was created through a r ...
, and
GV.
Sundar Pichai
Pichai Sundararajan (born June 10, 1972), better known as Sundar Pichai (), is an Indian-American business executive. He is the chief executive officer (CEO) of Alphabet Inc. and its subsidiary Google.
Born in Madurai, India, Pichai earned hi ...
, Product Chief, became the new CEO of Google, replacing
Larry Page
Lawrence Edward Page (born March 26, 1973) is an American business magnate, computer scientist and internet entrepreneur. He is best known for co-founding Google with Sergey Brin.
Page was the chief executive officer of Google from 1997 unti ...
, who transitioned to the role of running Alphabet, along with Google co-founder Sergey Brin.
In his announcement, Page stated that the planned holding company would allow for "more management scale, as we can run things independently that aren't very related" to Google. He clarified that, as a result of the new holding company, Google would be "a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead".
He further stated that the motivation behind the reorganization is to make Google "cleaner and more accountable and better" and that that he wanted to improve "the transparency and oversight of what we're doing".
Former executive
Eric Schmidt (now Technical Advisor) revealed in the conference in 2017 the inspiration for this structure came from
Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is currently the chairman and CEO of Berkshire Hathaway. He is one of the most successful investors in the world and has a net ...
and his management structure of
Berkshire Hathaway
Berkshire Hathaway Inc. () is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from which it invests the float (the retained premiu ...
a decade ago.
Schmidt said it was he who encouraged Page and Brin to meet with Buffett in Omaha to see how Berkshire Hathaway was a holding company made of subsidiaries with strong CEOs who were trusted to run their businesses.
Before it became a subsidiary of Alphabet, Google Inc. was first structured as the owner of Alphabet. The roles were reversed after a placeholder subsidiary was created for the ownership of Alphabet, at which point the newly formed subsidiary was merged with Google. Google's stock was then converted to Alphabet's stock. Under the
Delaware General Corporation Law
The Delaware General Corporation Law (Title 8, Chapter 1 of the Delaware Code) is the statute of the Delaware Code that governs corporate law in the U.S. state of Delaware. Adopted in 1899, the statute has since seen Delaware become the most im ...
(where Alphabet is incorporated), a holding company reorganization such as this can be done without a vote of shareholders, as this reorganization was.
The restructuring process was completed on October 2, 2015.
Alphabet retains Google Inc.'s stock price history and continues to trade under Google Inc.'s former ticker symbols "GOOG" and "GOOGL"; both classes of stock are components of major
stock market indices such as the
S&P 500
The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices. As of ...
and
NASDAQ-100
The Nasdaq-100 (^NDX) is a stock market index made up of 101 equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index. The stocks' weights in the in ...
.
On December 3, 2019, Page and Brin jointly announced that they would step down from their respective roles, remaining as employees and still the majority vote on the board of directors.
Sundar Pichai
Pichai Sundararajan (born June 10, 1972), better known as Sundar Pichai (), is an Indian-American business executive. He is the chief executive officer (CEO) of Alphabet Inc. and its subsidiary Google.
Born in Madurai, India, Pichai earned hi ...
, the CEO of Google, is to assume the CEO role at Alphabet while retaining the same at Google.
The firm completed a
stock split
A stock split or stock divide increases the number of shares in a company. For example, after a 2-for-1 split, each investor will own double the number of shares, and each share will be worth half as much.
A stock split causes a decrease of mark ...
in mid-2022.
Structure
Beside its largest subsidiary, Google, Alphabet Inc. has several other subsidiaries in several other industries, among others:
, their equity is held by a subsidiary known as XXVI Holdings, Inc. (referring to the Roman numeral of 26, the number of letters in the alphabet), so that they can be valued and legally separated from Google. At the same time, it was announced that Google would be reorganized as a
limited liability company
A limited liability company (LLC for short) is the US-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of ...
, Google LLC.
Eric Schmidt said at an
Internet Association
The Internet Association (IA) was an American lobbying group based in Washington, D.C., which represented companies involved in the Internet. It was founded in 2012 by Michael Beckerman and several companies, including Google, Amazon, eBay, and F ...
event in 2015 that there may eventually be more than 26 Alphabet subsidiaries. He also said that he was currently meeting with the CEOs of the current and proposed Alphabet subsidiaries. He said, "You'll see a lot coming."
While many companies or divisions formerly a part of Google became subsidiaries of Alphabet, Google remains the umbrella company for Alphabet's Internet-related businesses. These include widely used products and services long associated with Google, such as the
Android mobile operating system,
YouTube
YouTube is a global online video sharing and social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by Google, and is the second mo ...
, and
Google Search
Google Search (also known simply as Google) is a search engine provided by Google. Handling more than 3.5 billion searches per day, it has a 92% share of the global search engine market. It is also the most-visited website in the world.
The ...
, which remain direct components of Google.
Former subsidiaries include
Nest Labs
Google Nest is a line of smart home products including smart speakers, smart displays, streaming devices, thermostats, smoke detectors, routers and security systems including smart doorbells, cameras and smart locks.
The Nest brand name ...
, which was merged into Google in February 2018 and
Chronicle which was merged with Google Cloud in June 2019.
Sidewalk Labs
Sidewalk Labs is an urban planning and infrastructure subsidiary of Google. Its stated goal is to improve urban infrastructure through technological solutions, and tackle issues such as cost of living, efficient transportation and energy usage. ...
was absorbed into Google in 2021 following CEO
Daniel L. Doctoroff's departure from the company due to a suspected
ALS diagnosis.
In January 2021,
Loon LLC
Loon LLC was an Alphabet Inc. subsidiary working on providing Internet access to rural and remote areas. The company used high-altitude balloons in the stratosphere at an altitude of to to create an aerial wireless network with up to 1 Mbit ...
CEO Alastair Westgarth mentioned in a blog post that the company would be shutting down, citing lack of a scalable and sustainable business model. In July 2021, Alphabet announced
Intrinsic
In science and engineering, an intrinsic property is a property of a specified subject that exists itself or within the subject. An extrinsic property is not essential or inherent to the subject that is being characterized. For example, mass ...
, a new
robotics
Robotics is an interdisciplinary branch of computer science and engineering. Robotics involves design, construction, operation, and use of robots. The goal of robotics is to design machines that can help and assist humans. Robotics integrate ...
software company spun out of X. In November 2021, Alphabet announced a new company named
Isomorphic Labs
Isomorphic Labs is a drug discovery company launched in the United Kingdom in November 2021.
The company was established under Alphabet Inc., the parent company of Google. It is led by Demis Hassabis. Isomorphic Labs was incorporated in Februa ...
, using artificial intelligence for
drug discovery and headed by DeepMind CEO
Demis Hassabis
Demis Hassabis (born 27 July 1976) is a British artificial intelligence researcher and entrepreneur. In his early career he was a video game AI programmer and designer, and an expert player of board games. He is the chief executive officer and ...
.
Senior leadership
* ''Chair:''
John L. Hennessy
John Leroy Hennessy (born September 22, 1952) is an American computer scientist, academician and businessman who serves as Chairman of Alphabet Inc. Hennessy is one of the founders of MIPS Computer Systems Inc. as well as Atheros and served as t ...
(since February 2018)
* ''Chief Executive:''
Sundar Pichai
Pichai Sundararajan (born June 10, 1972), better known as Sundar Pichai (), is an Indian-American business executive. He is the chief executive officer (CEO) of Alphabet Inc. and its subsidiary Google.
Born in Madurai, India, Pichai earned hi ...
(since December 2019)
* ''Chief Financial Officer:''
Ruth Porat
Ruth Porat (born 1958) is a British-American business executive serving as Chief Financial Officer of Alphabet and its subsidiary Google since 2015.
In 2020, Porat was listed as the 16th most powerful woman in the world by ''Forbes'',
* ''Chief Accounting Officer:'' Amie Thuener O'Toole
List of former board chairs
#
Eric Schmidt (2015–2017)
List of former chief executives
#
Larry Page
Lawrence Edward Page (born March 26, 1973) is an American business magnate, computer scientist and internet entrepreneur. He is best known for co-founding Google with Sergey Brin.
Page was the chief executive officer of Google from 1997 unti ...
(2015–2018)
Corporate identity
Page explained the origin of the company's name:
In a 2018 talk, Schmidt disclosed that the original inspiration for the name came from the location of the then Google Hamburg office's street address: .
Alphabet has chosen the domai
abc.xyzwith the
.xyz
.xyz is a top-level domain name. It was proposed in ICANN's New generic top-level domain (gTLD) Program, and became available to the general public on June 2, 2014. The domain name came about both because the three letters are the last in the ...
top-level domain
A top-level domain (TLD) is one of the domains at the highest level in the hierarchical Domain Name System of the Internet after the root domain. The top-level domain names are installed in the root zone of the name space. For all domains in ...
(TLD), which was introduced in 2014. It does not own the domai
alphabet.com which is owned by a
fleet management
Fleet management is the management of:
* Commercial motor vehicles such as cars, vans, trucks, specialist vehicles (such as mobile construction machinery), forklifts, and trailers
* Private vehicles used for work purposes (the 'grey fleet')
* Av ...
division of
BMW. Following the announcement, BMW said it would be "necessary to examine the legal trademark implications" of the proposals. Additionally, it does not own the domai
abc.com which is the domain of the
Disney
The Walt Disney Company, commonly known as Disney (), is an American multinational mass media and entertainment conglomerate headquartered at the Walt Disney Studios complex in Burbank, California. Disney was originally founded on October ...
-owned
American Broadcasting Company
The American Broadcasting Company (ABC) is an American commercial broadcast television network. It is the flagship property of the ABC Entertainment Group division of The Walt Disney Company. The network is headquartered in Burbank, Cali ...
.
The website features an
Easter egg
Easter eggs, also called Paschal eggs, are eggs that are decorated for the Christian feast of Easter, which celebrates the resurrection of Jesus. As such, Easter eggs are common during the season of Eastertide (Easter season). The oldest tr ...
in the paragraph where Larry Page writes, "Sergey and I are seriously in the business of starting new things. Alphabet will also include our
X lab, which incubates new efforts like
Wing
A wing is a type of fin that produces lift while moving through air or some other fluid. Accordingly, wings have streamlined cross-sections that are subject to aerodynamic forces and act as airfoils. A wing's aerodynamic efficiency is e ...
, our
drone delivery effort. We are also stoked about growing our investment arms, Ventures and Capital, as part of this new structure." The period after "drone delivery effort" is a
hyperlink to "hooli.xyz", a reference to the television series ''
Silicon Valley
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical areas San Mateo Coun ...
''.
Finances
For the fiscal (and calendar) year 2021, Alphabet reported a net income of $76.033 billion. The annual revenue was $257.6 billion, an increase of 41% over the previous fiscal year.
As per its 2017 annual report, 86% of Alphabet's revenues came from performance advertising (through user clicks using
AdSense
Google AdSense is a program run by Google through which website publishers in the Google Network of content sites serve text, images, video, or interactive media advertisements that are targeted to the site content and audience. These advert ...
and
Google Ads
Google Ads (formerly Google AdWords) is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, or videos to web users. It can place ads both in the result ...
) and brand advertising.
Of these, 53% came from its international operations. This translated to a total revenue of US$110,855 million in 2017 and a net income of US$12,662 million.
On February 1, 2016, Alphabet Inc. surpassed
Apple
An apple is an edible fruit produced by an apple tree (''Malus domestica''). Apple trees are cultivated worldwide and are the most widely grown species in the genus ''Malus''. The tree originated in Central Asia, where its wild ancestor, ' ...
to become the world's most valuable publicly traded company until February 3, 2016, when Apple surged back over Alphabet to retake the position. Experts cited Apple's lack of innovation as well as increasing Chinese competition as reasons for the poor performance.
, Alphabet is ranked No. 15 on the
''Fortune'' 500 rankings of the largest United States corporations by total revenue.
On January 16, 2020, Alphabet became the fourth US company to reach a $1
trillion
''Trillion'' is a number with two distinct definitions:
* 1,000,000,000,000, i.e. one million million, or (ten to the twelfth power), as defined on the short scale. This is now the meaning in both American and British English.
* 1,000,000,000,0 ...
market value entering the
trillion dollar companies club for the first time.
In October 2022, Alphabet recorded the weakest quarterly growth, with fewer sales in nearly a decade. The possible global recession, the strong US dollar, and the pandemics all contributed to the slowed economy.
Investments and acquisitions
Investments
In November 2017, Alphabet Inc. led a Series A round of $71 million along with
Andreessen Horowitz
Andreessen Horowitz (also called a16z, legal name AH Capital Management, LLC) is a private American venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. The company is headquartered in Menlo Park, California.
Andreessen H ...
and
20th Century Fox
20th Century Studios, Inc. (previously known as 20th Century Fox) is an American film production company headquartered at the Fox Studio Lot in the Century City area of Los Angeles. As of 2019, it serves as a film production arm of Walt Dis ...
in music startup
UnitedMasters
UnitedMasters is an American music distributor based in the United States founded by Steve Stoute in November 2017. UnitedMasters gives artists the ability to distribute music to all major streaming services. Distributed artists are eligible to par ...
, founded by
Steve Stoute.
In addition to funding startups, Alphabet also invests in more mature companies, including publicly traded companies like
Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), packa ...
and privately held companies like
Medium
Medium may refer to:
Science and technology
Aviation
*Medium bomber, a class of war plane
*Tecma Medium, a French hang glider design
Communication
* Media (communication), tools used to store and deliver information or data
* Medium of ...
.
Acquisitions
An analysis of the company's investments in 2017 suggested that it was the most active investor in that period, outdoing the capital arm of
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
and also its own best customer. Alphabet, Inc. acquired seven of its own capital-backed startups in the 2017 financial year, with
Cisco
Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational digital communications technology conglomerate corporation headquartered in San Jose, California. Cisco develops, manufactures, and sells networking hardware, ...
second having acquired six of the company's previous investments.
Lawsuits and controversies
In 2017, Alphabet Inc. sued
Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), packa ...
over technology similar to Alphabet's proprietary
self-driving car
A self-driving car, also known as an autonomous car, driver-less car, or robotic car (robo-car), is a car that is capable of traveling without human input.Xie, S.; Hu, J.; Bhowmick, P.; Ding, Z.; Arvin, F.,Distributed Motion Planning for S ...
technology. Alphabet's
autonomous vehicle
Vehicular automation involves the use of mechatronics, artificial intelligence, and multi-agent systems to assist the operator of a vehicle (car, aircraft, watercraft, or otherwise).Hu, J.; Bhowmick, P.; Lanzon, A.,Group Coordinated Control o ...
technology had been under development for a decade by Alphabet's
Waymo
Waymo LLC, formerly known as the Google self-driving car project, is an American autonomous driving technology company headquartered in Mountain View, California. It is a subsidiary of Alphabet Inc, the parent company of Google.
Waymo oper ...
(self-driving vehicle division). The
proprietary technology is related to 14,000 documents believed to have been downloaded and stolen by a former Waymo engineer, subsequently employed by Uber.
The lawsuit was settled in February 2018, with Uber agreeing not to use the self-driving technology in dispute and also agreed to provide
Waymo
Waymo LLC, formerly known as the Google self-driving car project, is an American autonomous driving technology company headquartered in Mountain View, California. It is a subsidiary of Alphabet Inc, the parent company of Google.
Waymo oper ...
with an equity stake of 0.34%, equating to around $245 million at the firm's early 2018 value.
In October 2018, a class action lawsuit was filed against
Google
Google LLC () is an American Multinational corporation, multinational technology company focusing on Search Engine, search engine technology, online advertising, cloud computing, software, computer software, quantum computing, e-commerce, ar ...
and Alphabet due to "non-public" Google+ account data being exposed as a result of a privacy bug that allowed app developers to gain access to the private information of users. The litigation was settled in July 2020 for $7.5 million with a payout to claimants of at least $5 each, with a maximum of $12 each.
In October 2020, the
United States Department of Justice
The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United Stat ...
filed an antitrust lawsuit against Alphabet, alleging anti-competitive practices.
On 2 December 2020, the
National Labor Relations Board
The National Labor Relations Board (NLRB) is an independent agency of the federal government of the United States with responsibilities for enforcing U.S. labor law in relation to collective bargaining and unfair labor practices. Under the Na ...
filed a complaint that claimed Alphabet Inc conducted unlawful monitoring and questioning of several workers at Google. The employees in question were fired for unionization attempts and protesting company policies. The board also alleges that Google unlawfully placed employees on administrative leave in retribution. Alphabet Inc has denied any wrongdoing and said it acted legally.
On 7 June 2021, Alphabet Inc., parent company to Google, announced it had settled an
antitrust suit with the French ''
Autorité de la concurrence'' with a payment of $270 million. The settlement amounted to less than 0.7% of Alphabet Inc.'s yearly earnings.
On 12 June 2021, it was announced that Japan would launch an antitrust probe into Alphabet Inc. and Apple Inc. to determine whether their dealings with Japanese smartphone makers violate current antitrust measures or could necessitate new ones.
In May 2022, the Russian authorities have seized Google's Russian bank account forcing them to file for bankruptcy one month after as they are unable to pay vendors and staff. However, they continue to keep free services such as Search, YouTube, Gmail, Maps, Android and Play available.
See also
*
Google LLC
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. It ...
*
*
References
External links
*
{{Authority control, state=expanded
2015 establishments in California
American companies established in 2015
Companies based in Mountain View, California
Companies based in Silicon Valley
Companies listed on the Nasdaq
Computer-related introductions in 2015
Conglomerate companies established in 2015
Conglomerate companies of the United States
Google
Holding companies established in 2015
Holding companies of the United States
Multinational companies headquartered in the United States
Technology companies based in the San Francisco Bay Area
Technology companies established in 2015
Biotechnology companies of the United States