Sundar Pichai has been appointed chief executive of Google, after the company’s founders announced plans to restructure its operations under the Alphabet parent company. The reorganization also cements the rise of longtime Google Indian American executive Sundar Pichai , who will become CEO for the core Google business. “Sundar has been saying the things I would have said (and sometimes better!) for quite some time now,” Page wrote in a blog post announcing the changes.
Alphabet will be the parent company of the new Google, along with several other businesses that were previously crammed into Google itself. Some examples of divisions being broken off include the X labs, Google Ventures, YouTube, and Google Life Sciences. The new Google will still do all the things we think of as Google’s main business. It’s still handling search, Android, ads, and so on. This change simply allows the more “out there” businesses to retain their focus and autonomy as part of Alphabet.
Sundar Pichai, who previously oversaw many of the Google, the popular search company’s core products, will become chief executive of Google – which will incorporate search, web advertising, Gmail, YouTube, Chrome and Android. Google has announced a major restructuring , that will see the internet giant separate its core business from its ambitious research divisions, and launch a new parent company called Alphabet. As part of the restructure , Larry Page will become chief executive of Alphabet, Sergey Brin will become president, Eric Schmidt will become executive chairman.
Each company within the Alphabet umbrella will have its own CEO, and in the case of Google, that’s Sundar Pichai. Alphabet with Larry and Sergey at the helm will still manage all the resource allocation and determine compensation for the various CEOs. Google’s stock will also be transformed one-to-one into shares of Alphabet, but it will still be traded under the GOOG and GOOGL symbols. Going forward, Google will report quarterly results separately for Google and the other Alphabet companies as a whole.
The company will continue to use the Google name for its popular Internet search engine, mapping service and related products. But CEO and co-founder Larry Page said the creation of the new holding company called Alphabet will provide more independence for divisions like Nest, which makes Internet-connected home appliances, and Calico, which is researching ways to prolong human life.
Pichai, who was named overall chief of Google products last fall, is viewed by many as a potential successor to Page. While the Google co-founder has not indicated any plans to retire, he has at times struggled with a condition affecting his vocal cords that interfered with his ability to speak.
The 43-year-old Pichai, who joined Google in 2004, is generally known as a soft-spoken but highly effective manager. After leading efforts to build the company’s Chrome browser and related products, Pichai was given responsibility in 2013 for Google’s Android mobile operating system — a crucial role as the company was seeing much of its Internet business shift to mobile devices.
Analysts said the move may also be a nod to Wall Street demands for more fiscal accountability: As part of the reorganization, Page said the company will begin reporting financial results by segments. That should give a clearer picture of how Google’s core Internet business is performing, separate from other ventures, said analyst Colin Gillis of the investment firm BGC Partners. “They promised to give us more information,” Gillis said. “Now we’ll get a chance to see.”
Google reported more than $14 billion in profit on $66 billion in sales last year, most of it from lucrative Internet advertising, while other ventures have required large investments without showing immediate returns. The company’s stock has surged in recent weeks after a new chief financial officer announced other moves to rein in corporate spending.
With the reorganization, Page signaled that he wants to give more authority to CEOs of the companies that will be part of the new entity known as Alphabet. Page said that Pichai was the natural choice to lead Google, adding that he has “really stepped up” since October of last year, when he took on product and engineering responsibility for Google’s internet businesses.
Some suggested that Pichai had been approached by Twitter, which is looking for a chief executive , and that he was promoted in order to keep him on board. Page said that Pichai will continue to drive innovation and stretch boundaries at Google, and ensure that the company “can continue to make big strides on our core mission to organise the world’s information”. Schmidt, who was chief executive of Google from 2001 to 2011 before becoming executive chairman, also tweeted his support for Pichai’s appointment.
Pichai was born and grew up in Chennai, studied engineering at IIT-Kharagpur, then came to Stanford in the US, and went on to complete an MBA from Wharton School of Business. Pichai’s rise within Google tracks closely those of other Indian Americans in the IT industry. Hyderabad-born Satya Nadella became CEO of Microsoft in 2014. Shantanu Narayen, also from Hyderabad, heads Adobe, and Nikesh Arora, a former Googler, was named president and COO of Japan’s SoftBank in 2014.
“Sergey and I have been super excited about his progress and dedication to the company. And it is clear to us and our board that it is time for Sundar to be CEO of Google,” he said in a blog post . “I feel very fortunate to have someone as talented as he is to run the slightly slimmed down Google and this frees up time for me to continue to scale our aspirations. I have been spending quite a bit of time with Sundar, helping him and the company in any way I can, and I will of course continue to do that.”
