Markets

Google is Now Officially Alphabet, Tickers and Board In Tact

Google Inc.GOOGL has completed its major corporate restructuring that promises better clarity on its core business.

The formation of a new holding company called Alphabet is now complete. Google will begin trading as Alphabet on Nasdaq but with the same ticker symbols GOOG and GOOGL. Each share of Google will be automatically converted into the Alphabet stock. Also, Google and Alphabet will share the same board of directors.

Post restructuring, Google is now the wholly owned subsidiary of the new parent company, Alphabet. It comprises the elements of the core business only, which includes search, ads, YouTube, Android, Chrome and infrastructure. Sundar Pichai, who earlier headed Android, search, Google Drive, Chrome OS, Maps, apps, ads and more (most of the business, in fact, except YouTube) is the new CEO of Google and Ruth Porat is the CFO.

Coming to Alphabet, in its kitty is Calico (research on longevity), Nest (smart thermostats and related products), Google Fiber (for high speed Internet access), Life Sciences (contact lenses to test diabetes from tear drops, etc.), robots, Google Capital and Google Ventures (investments in startups) among other business endeavors. The important Alphabet management names include Larry Page as the CEO, Sergey Brin as President, Eric Schmidt as Executive Chairman and Porat as CFO.

The goal of this restructuring is to separate the core business components from the rest of the company's ventures. Alphabet will report separate numbers for Google and its other businesses starting Jan 2016. So investors will have a better idea of what's going on, leading to increased clarity. However, the upcoming third-quarter financial results will be reported in the same way as in the past.

Also, the new structure will lead to increased focus on innovation, including daring, speculative and even apparently crazy projects. New companies can be bought and run under the Alphabet umbrella or existing projects can be spun off as required. Page also said that, the structure will allow the company to "run things independently that aren't very related" while keeping "tremendous focus on the extraordinary opportunities" within Google.

Google carries a Zacks Rank #2 (Buy). Some other technology stocks worth considering are IZEA, Inc. IZEA and Inphi Corporation IPHI , sporting a Zacks Rank #1 (Strong Buy), and LendingClub Corporation LC , carrying a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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