Second Nexus Digest: NYTimes; Wired

Silicon Valley is in for a major shake up: Google just announced its plans to restructure. Essentially, the company is splitting off its internet business from its endeavors in technological innovation and finance; all will be run by a new parent company called Alphabet.

But fear not! Google is not exactly “under new management.” Google’s CEO and co-founder, Larry Page, will head up Alphabet as CEO; co-founder, Sergey Brin, will serve as President. The company has also announced that Sundar Pichai, Google’s acting Senior Vice President in charge of products, will take over as CEO of Google. Other companies that will be under Alphabet’s umbrella are Google Fiber (a high speed internet service provider), Google Ventures (a venture capital business) and Capital (a private equity company).

Page explained the reorganization in a blog post on Monday: “What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead.” The company’s extensive reorganization seems to have been inspired by pressure from Wall Street.  Notwithstanding the success of Google’s internet ventures (e.g., Google Maps, Youtube, Chrome, Android, etc.), investors have been more than a little perturbed by Google’s other forays into the worlds of pharmaceuticals and drones -- risky experiments that have not, on the whole, paid off. The new structure creates calmer waters for internet investors, while allowing the company to continue to explore and innovate.

Google has been aching to discover new ways to diversify its business while remaining true to its brand; Alphabet is an innovative way do just that and more.