Alphabet Inc.

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Alphabet Inc.
The letters of "Alphabet" colored in red
Alphabet Inc.'s logo since 2015
Googleplex-Patio-Aug-2014.JPG
Googleplex, home to Alphabet Inc., in Mountain View, California
Type
Public
Traded as
NASDAQ: GOOGL (Class A)
NASDAQ: GOOG (Class C)
NASDAQ-100 components
S&P 100 components
S&P 500 components
ISIN US02079K3059
US02079K1079
Industry Conglomerate
Founded October 2, 2015; 3 years ago
Founders
Larry Page
Sergey Brin
Headquarters Googleplex, Mountain View, California, U.S.
Area served
Worldwide
Key people
Larry Page (CEO)
Sergey Brin (president)
John Hennessy (chairman)
David Drummond (CLO and SVP)
Ruth Porat (CFO)
Products
TechnologyInternetsoftwarelife sciencesautonomous carsresearch and
developmentbiotechnologyList of Google products
Revenue Increase US$110.86 billion (2017)
Operating income
Increase US$26.15 billion (2017)
Net income
Decrease US$12.66 billion (2017)
Total assets Increase US$197.30 billion (2017)
Total equity Increase US$152.50 billion (2017)
Number of employees
Increase 94,372[1] (2018)
Subsidiaries
CalicoCapitalGChronicleDeepMindGoogleGoogle FiberGVJigsawLoonSidewalk
LabsVerilyWaymoX
Website abc.xyz
Footnotes / references
[2]
Alphabet Inc. is an American multinational conglomerate headquartered in Mountain
View, California. It was created through a corporate restructuring of Google on
October 2, 2015,[3] and became the parent company of Google and several former
Google subsidiaries.[4][5][6] The two founders of Google assumed executive roles in
the new company, with Larry Page serving as CEO and Sergey Brin as president.[7]

Alphabet's portfolio encompasses several industries, including technology, life

sciences, investment capital, and research. Some of its subsidiaries include
Google, Calico, Chronicle, GV, CapitalG, Verily, Waymo, X, Loon[8] and Google
Fiber. Some of the subsidiaries of Alphabet have altered their names since leaving
Google and becoming part of the new parent company�Google Ventures becoming GV,
Google Life Sciences becoming Verily and Google X becoming just X. Following the
restructuring, Page became CEO of Alphabet and Sundar Pichai took his position as
CEO of Google.[4][5] Shares of Google's stock have been converted into Alphabet
stock, which trade under Google's former ticker symbols of "GOOG" and "GOOGL". As
of 2018, Alphabet is ranked No. 22 on the Fortune 500 rankings of the largest
United States corporations by total revenue.[9]

The establishment of Alphabet was prompted by a desire to make the core Google
Internet services business "cleaner and more accountable" while allowing greater
autonomy to group companies that operate in businesses other than Internet
services.[5][10]

Contents
1 History
1.1 Website
2 Structure
3 Revenue
4 Proposed growth
5 Restructuring process
6 Lawsuit
7 Investments and acquisitions
7.1 Investments
7.2 Acquisitions
8 CEO-to-worker Pay Ratio
9 See also
10 References
11 External links
History
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.[5] 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, CapitalG, and GV.
[7][11][12] Sundar Pichai, Product Chief, became the new CEO of Google, replacing
Larry Page.[13][14]

In his announcement, Page described the planned holding company as follows:[5][15]

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. [...]
Fundamentally, we believe this allows us more management scale, as we can run
things independently that aren't very related.

As well as explaining the origin of the company's name:

We liked the name Alphabet because it means a collection of letters that represent
language, one of humanity's most important innovations, and is the core of how we
index with Google search! We also like that it means alpha-bet (Alpha is investment
return above benchmark), which we strive for!

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: ABC-Stra�e
[de].[16]
Page says the motivation behind the reorganization is to make Google "cleaner and
more accountable". He also said he wanted to improve "the transparency and
oversight of what we're doing", and to allow greater control of unrelated
companies.[5][10]

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.[17][18]

Website
Alphabet has chosen the domain abc.xyz with the .xyz top-level domain (TLD), which
was introduced in 2014. It does not own the domain alphabet.com, which is owned by
a fleet management division of BMW. BMW has said that it is "necessary to examine
the legal trademark implications" of the proposals. Additionally, it does not own
the domain abc.com, which is the promoted domain of the Disney-owned American
Broadcasting Company (abc.com redirects to a subdomain of go.com, through which
most of Disney's sites are hosted).[19][20]

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",[21] a reference to the television series Silicon Valley.
[22]

Structure
Alphabet's largest subsidiary is Google, other subsidiaries being Calico,
Chronicle, Dandelion, DeepMind, GV, CapitalG, X, Google Fiber, Jigsaw, Sidewalk
Labs, Verily and Waymo. As of September 1, 2017, their equity are 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.[23]

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 many of the most widely used products and services long
associated with Google, such as the Android mobile operating system, YouTube, LLC,
and Google Search, which remain direct components of Google.[7][24]

Former subsidiaries include Nest Labs, which was merged into Google in February
2018.[25]

Revenue
As per its 2017 annual report, 86% of Alphabet's revenues came from Performance
advertising (through user clicks using Adsense and AdWords) and Brand Advertising.
[26] 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.

Proposed growth
Eric Schmidt 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."[27]

Restructuring process
Google Inc. was restructured as a subsidiary directly owned by Alphabet. The roles
of these two companies � Google as the owner and Alphabet as the subsidiary � was
reversed in a two-step switch. First, a dummy subsidiary of Alphabet was created.
Then Google merged with that dummy subsidiary while converting Google stock to
Alphabet stock. Under Delaware law, a holding company reorganization such as this
can be done without a vote of shareholders, as this reorganization was.[28]

The restructuring process was completed on October 2, 2015.[3] 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 and NASDAQ-100.[29]

Lawsuit
Alphabet Inc. sued Uber over technology similar to Alphabet's proprietary self-
driving car technology. Alphabet's autonomous vehicle technology has 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.
[30][31] 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.[32]

Investments and acquisitions

Investments
In January 2017, Alphabet Inc. led a Series B round of $15 million along with
Sequoia India in education startup Cuemath.[33]

In October 2017, Alphabet Inc. led a $1 billion round in Lyft.[34]

In November 2017, Alphabet Inc. led a Series A round of $70 million along with
Andreessen Horowitz and 20th Century Fox in music startup United Masters, founded
by Steve Stoute.[35]

Acquisitions
Main article: List of mergers and acquisitions by Alphabet
On January 13, 2018, Alphabet Inc. acquired smartphone technology startup Redux,
which specialized in turning smartphone screens into speakers. Spectators claimed
that the technology would somehow be integrated into Google's smartphone Pixel.[36]

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 7 of its own capital-backed startups in the
2017 financial year, with Cisco second having acquired 6 of the company's previous
investments.[37]

Flatiron Health, a start-up founded by two former Google employees and backed by
Alphabet, Inc., announced that it was to be acquired by health conglomerate
Hoffman-La Roche for $1.8 billion. The company provides electronic medical records
and analysis to identify improved treatments for oncology patients.[38]

CEO-to-worker Pay Ratio

For the first time in 2018, a new Securities and Exchange Commission rule mandated
under the 2010 Dodd-Frank financial reform requires publicly traded companies to
disclose how their CEOs are compensated in comparison with their employees. In
public filings, companies have to disclose their "pay ratios", or the CEO's
compensation divided by the median employee's.[39] Alphabet Inc. Chief Executive
Officer Larry Page takes home $1 a year, while the median worker at the company
earns $197,274. That means the CEO pay ratio is 0.000005-to-1.[40] As of April
2018, steelmaker Nucor represented the median CEO-to-worker ratio from SEC filings
with values of 133 to 1.[41]

See also
Portal-puzzle.svg Alphabet Inc. portal
References
"Alphabet Announces Third Quarter 2018 Results" (PDF). Alphabet Inc. October 25,
2018. Retrieved October 26, 2018.
"Alphabet Inc. 2017 Annual Report Form (10-K)". sec.gov. U.S. Securities and
Exchange Commission. February 6, 2018. Retrieved August 24, 2018.
"SEC Filing (Form 8-K) by Alphabet Inc". U.S. Securities and Exchange Commission.
October 2, 2015.
"Google to be part of new holding company, 'Alphabet'". Retrieved August 11, 2015.
Page, Larry. "G is for Google". Google Official Blog. Retrieved August 11, 2015.
"Google creates new parent company called Alphabet". CNET.com. Archived from the
original on September 17, 2015. Retrieved September 19, 2015.
Womack, Brian (August 10, 2015). "Google Creates New Company Called Alphabet,
Restructures Stock". Bloomberg. Retrieved August 10, 2015.
"Google's Loon brings internet-by-balloon to Kenya". July 19, 2018. Archived from
the original on July 19, 2018. Retrieved July 19, 2018.
"Fortune 500 Companies 2018: Who Made the List". Fortune. Retrieved 2018-11-09.
Metz, Cade. "A New Company Called Alphabet Now Owns Google". Wired. Cond� Nast.
Retrieved August 13, 2015.
Greenberg, Julia (August 10, 2015). "What Google, I Mean Alphabet, Looks Like
Now". Wired. Cond� Nast. Retrieved August 10, 2015.
"What is Alphabet, Google's new company?". Business Insider. Retrieved August 10,
2015.
Chen, Angela (August 10, 2015). "Google Creates Parent Company Called Alphabet in
Restructuring". Wall Street Journal. Retrieved August 10, 2015.
Dougherty, Conor (August 10, 2015). "Google to Reorganize in Move to Keep Its Lead
as an Innovator". The New York Times. Retrieved August 10, 2015.
"Google's Larry Page explains the new Alphabet". CNET.com. Retrieved September 19,
2015.
"Wie die Hamburger ABC-Stra�e Google pr�gte". abendblatt.de. Retrieved November
30, 2018.
Levy, Ari. "Google passes Apple as most valuable company". CNBC.com. NBCUniversal.
Retrieved February 1, 2016.
Krantz, Matt. "Apple not going down easy as it overtakes Google parent Alphabet".
USA Today. Retrieved February 3, 2016.
Davidson, Lauren. "Google unveils Alphabet... but that's already trademarked by
BMW". Daily Telegraph. Retrieved August 12, 2015.
Lardinois, Frederic (August 10, 2015). "Google Is Now Alphabet, But It Doesn't Own
Alphabet.com". TechCrunch. AOL Inc. Retrieved August 11, 2015.
"hooli".
Stubbs, David (August 12, 2015). "Google's hooli.xyz Easter egg proves Silicon
Valley is tech's own Spinal Tap". The Guardian. Retrieved February 28, 2016.
"Alphabet Finishes Reorganization With New XXVI Company". Bloomberg.com. September
1, 2017. Retrieved September 2, 2017.
"Google's new Alphabet, from A to Z (pictures)". CNET.com. Retrieved August 12,
2015.
Amadeo, Ron (February 7, 2018). "Nest is done as a standalone Alphabet company,
merges with Google". Ars Technica.
Annual report 2017. Alphabet investor relations. 2 March 2018. pp. 2, 3, 5, 6.
Retrieved 3 December 2018.
Bergen, Mark. "Eric Schmidt: Get Ready for 'a Lot' More Alphabet Companies".
Recode.net. Re/code. Retrieved October 19, 2015.
"Google Inc. filing with the SEC, Form 8-K". United States Securities and Exchange
Commission. August 10, 2015. Retrieved August 11, 2015.
"GOOGL : Summary for Alphabet Inc". finance.yahoo.com. Retrieved December 4, 2017.
Sage, Alexandria (May 30, 2017). "Uber fires self-driving car chief at center of
court case". Reuters. Retrieved May 30, 2017.
Isaac, Mike; Wakabayashi, Daisuke (May 30, 2017). "Uber Fires Former Google
Engineer at Heart of Self-Driving Dispute". The New York Times. Retrieved May 30,
2017.
Balakrishnan, Anita; D'Onfro, Jillian; Bosa, Deirdre; Zaveri, Paayal (February 9,
2018). "Uber settles dispute with Alphabet's self driving car unit". CNBC.com.
"Google's CapitalG invests in edu startup Cuemath". The Economic Times. 2017.
Retrieved December 4, 2017.
"Alphabet Unit Leads $1 Billion Investment in Lyft". Bloomberg.com. October 19,
2017. Retrieved December 24, 2017.
Constine, Josh. "With $70M from Alphabet, UnitedMasters replaces record labels".
TechCrunch. Retrieved December 4, 2017.
"Alphabet Inc (GOOGL) Acquires Smartphone Speaker Startup Redux". StockNews.com.
Retrieved January 14, 2018.
"A peek inside Alphabet's investing universe". Techcrunch. February 17, 2018.
Farr, Christina (February 15, 2018). "Alphabet-backed Flatiron Health is being
acquired by Roche". CNBC.com. Retrieved March 28, 2018.
"How does a company's CEO pay compare to its workers'? Now you can find out". Vox.
"Alphabet CEO makes a tiny fraction compared to its' median employee".
"How to track worker to CEO pay ratios".
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