Google Inc (NASDAQ:GOOG)’s founders Larry Page and Sergey Brin can now freely pursue their innovative ideas and invest on new technologies like glucose-monitoring contact lenses and high-altitude balloons.
Shareholders were pleased when the company announced the corporate restructuring on Monday that provides greater insight into GOOG’s key business and appeared less concerned about new ventures. The new holding company, Alphabet will isolate the core search and ads segments from riskier bets.
Analysts think that the company’s self-driving vehicles and health ventures have the potential to generate money, but it will have to wait several years for that.
Search, ads, YouTube, maps and Android will stay a part of Google under the new structure. The company’s product chief, Sundar Pichai will become the new CEO of Google. Analysts say that search will remain the financial engine, accounting for over 90 percent of the revenue.
The search engine giant said that Nest, Sidewalk, Calico, Google X, Google Ventures and Google Capital will continue their operations under their own heads. Through these ventures, the company has tried to achieve everything from enhancing public transport to extending the lifespan of humans.
Page will become the CEO of Alphabet, while Brin will be the president of the new holding company.
The search engine giant is planning to merge the financial reports of all ventures outside the key Google division,
Analysts believe that few of the projects will start generating revenue for the company. Google has already commenced testing its self-driving vehicles in California. The company has also hired leading researchers for its health ventures and now it will have the freedom to make investment for several years in research and testing products.
Google shares surged 4 percent yesterday following the announcement, and jumped up to 7 percent the prior day in after-hours trading session.
