Good-bye, Google as we know it. Hello, Alphabet

The company originally known for its search engine officially becomes Alphabet at the market close on Friday

This is the last day that Google is operating without a parent company.

After the close of markets Friday, the company officially will become Alphabet and will trade as such on Monday. Google will become a business unit running under the Alphabet umbrella and will focus on core Internet-related businesses, including search, YouTube and Android.

The company announced the official change on its investor relations page.

"Long-term, this could be a big deal, but it must be more than a name change," said Patrick Moorhead, an analyst with Moor Insights & Strategy. "Non-Google companies under Alphabet need to show a few things – like they need to enable innovation and autonomy."

Google announced in August that it was creating a parent company and that Google would become one of its wholly owned subsidiaries.

Alphabet is set to replace Google as the publicly traded entity and shares of Google will be the same number of shares of Alphabet. The company will still trade under the ticker symbol GOOG.

Google won't be the only subsidiary under the Alphabet umbrella.

Google X, the company's secretive research arm that came up with the autonomous car, will become its own business, as will Capital and Ventures, which will concentrate on funding startups.

Before the reorganization, everything the company was working on – search, Android, Chrome, Google Glass, robotics, driverless cars, drones and even smart contact lenses fell under the Google corporate umbrella. With this move, Google will shed all of its research projects, which aren't money makers, and will concentrate on its Internet-based businesses, like search, which is a huge money maker.

Similarly, the company, which has become known for its "moon shots" or outrageous-sounding research, should be able to put even more muscle behind new projects.

Google's research projects, like smart contact lenses that can read blood sugar levels for diabetics, will have its own executives overseeing the work.

With less attention split between money makers and big dreams, Alphabet is expected to be able to do a better job at both.

"This is a big deal because if they can accomplish what they're looking to… this puts in place a future operating model for a large company to truly innovate," said Moorhead. "I think this puts a meaningful separation between businesses generating cash, and research and science projects. For the company, it could mean they can keep driving profits today and invest in the far future."


Copyright © 2015 IDG Communications, Inc.

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