Alphabet Inc. is an American multinational conglomerate
headquartered in Mountain View, California
. It was created through a restructuring
on October 2, 2015,
and became the parent company of Google and several former Google subsidiaries
The two co-founders of Google remained as controlling shareholders, board members, and employees at Alphabet. Alphabet is the world's fourth-largest technology company by revenue
and one of the world's most valuable companies
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
and Sergey Brin
announced their resignation from their executive posts in December 2019, with the CEO role to be filled by Sundar Pichai
, also the CEO of Google. Page and Brin remain co-founders, employees, board members, and controlling shareholders
of Alphabet Inc.
On August 10, 2015, Google Inc.
announced plans to create a new public holding company
, Alphabet Inc. Google CEO Larry Page
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
, and GV
, Product Chief, became the new CEO of Google, replacing Larry Page
, who transitioned to the role of running Alphabet, along with Google co-founder Sergey Brin.
In his announcement, Page described the planned holding company as follows:
Page says the motivation behind the reorganization is to make Google "cleaner and more accountable and better". He also said he wanted to improve "the transparency and oversight of what we're doing", and to allow greater control of unrelated companies.
Former executive Eric Schmidt (now Technical Advisor) revealed in the conference in 2017 the inspiration for this structure came from Warren Buffett
and his management structure of Berkshire Hathaway
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
(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
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
, the CEO of Google, is to assume the CEO role at Alphabet while retaining the same at Google.
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 will be reorganized as a limited liability company
, Google LLC.
said at an Internet Association
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
, and Google Search
, which remain direct components of Google.
Former subsidiaries include Nest Labs
, which was merged into Google in February 2018 and Chronicle
which was merged with Google Cloud in June 2019.
CEO, Alastair Westgarth, mentioned in a blogpost that the company will be shutting down as of January 2021 citing lack of a scalable and sustainable business model.
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 domaiabc.xyz
ith the .xyz top-level domain
(TLD), which was introduced in 2014. It does not own the domaialphabet.com
which is owned by a fleet management
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 domaiabc.com
which is the domain of the Disney
-owned American Broadcasting Company
The website features an Easter egg
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
, 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
As per its 2017 annual report, 86% of Alphabet's revenues came from performance advertising (through user clicks using AdSense
and Google Ads
) 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
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
market value entering the trillion dollar companies club
for the first time.
Investments and acquisitions
In November 2017, Alphabet Inc. led a Series A round of $71 million along with Andreessen Horowitz
and 20th Century Fox
in music startup UnitedMasters
, founded by Steve Stoute
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
and also its own best customer. Alphabet, Inc. acquired seven of its own capital-backed startups in the 2017 financial year, with Cisco
second having acquired six of the company's previous investments.
Flatiron Health, a startup founded by two former Google employees and backed by Alphabet, Inc., announced that it was to be acquired by health conglomerate Hoffmann-La Roche
for $1.8 billion. The company provides electronic medical records and analysis to identify improved treatments for oncology
In 2017, Alphabet Inc. sued Uber
over technology similar to Alphabet's proprietary self-driving car technology. Alphabet's autonomous vehicle
technology had been under development for a decade by Alphabet's Waymo
(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
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
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
filed an antitrust lawsuit against Alphabet, alleging anti-competitive practices.
On 2 December 2020, the National Labor Relations Board
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.
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