What is Alphabet inc?

What is Alphabet inc

Alphabet Inc is an American multinational conglomerate that was created through a corporate restructuring of Google on October 2, 2015. Google, which was founded by Larry Page and Sergey Brin in 1998, became a subsidiary of Alphabet Inc. Alphabet serves as the parent company for various businesses and subsidiaries, each operating independently under its own brand. Google remains the largest and most well-known subsidiary of Alphabet.

Alphabet Inc was established to allow greater transparency and accountability in reporting financial results for the diverse range of businesses under its umbrella, giving investors and stakeholders a clearer view of the performance of individual subsidiaries. Larry Page serves as the CEO of Alphabet, while Sundar Pichai is the CEO of Google.

Under Alphabet, various businesses operate in areas such as internet-related products, technology innovation, and other ventures. Some of the notable subsidiaries include Google, Waymo (a self-driving car technology company), Verily (focused on life sciences and healthcare), and several others.

That’s a comprehensive overview of Alphabet Inc. The restructuring of Google into Alphabet was a significant move that allowed for a more streamlined and accountable structure within the company. The decision to create Alphabet was driven by a desire to separate the core Google business from its various subsidiaries, providing more autonomy to the different companies operating under the Alphabet umbrella.

Alphabet Inc. is noteworthy for being one of the largest and most valuable technology conglomerates globally, consistently ranking among the Big Five American information technology companies, which includes Amazon, Apple, Meta (formerly Facebook), and Microsoft. This positioning underscores the company’s significant influence and impact on the technology industry.

The founders, Larry Page and Sergey Brin, took a step back from their executive roles in Google and announced their resignation in December 2019. Sundar Pichai, who was already serving as the CEO of Google, took on the additional role of CEO of Alphabet Inc. This move allowed Page and Brin to remain involved in the company as employees, board members, and controlling shareholders while delegating the day-to-day operations to Pichai.


On August 10, 2015, Google announced its plans to create a new public holding company, Alphabet Inc. Larry Page, Google’s co-founder and CEO, made the announcement in a blog post. The restructuring aimed to narrow Google’s focus by moving subsidiaries from Google to Alphabet. The new holding company, Alphabet, included Google along with various other businesses such as X Development, Calico, Nest, Verily, Fiber, Makani, CapitalG, and GV.

Sundar Pichai, then Google’s Product Chief, became the new CEO of Google, while Larry Page transitioned to the role of running Alphabet, along with co-founder Sergey Brin. The move was intended to provide “more management scale” by allowing independent operations within Alphabet that weren’t closely related to Google’s core internet products.

The restructuring process involved creating a placeholder subsidiary for the ownership of Alphabet, which was then merged with Google. The roles were reversed, and Google became a subsidiary of Alphabet. The stock conversion took place, and Alphabet retained Google Inc.’s stock price history, continuing to trade under Google Inc.’s former ticker symbols “GOOG” and “GOOGL.” The entire process was completed on October 2, 2015, and Alphabet retained a position as one of the world’s most valuable and influential technology conglomerates.

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The inspiration for this corporate structure came from Warren Buffett’s management approach at Berkshire Hathaway. Eric Schmidt, a former executive and Technical Advisor, revealed in a conference in 2017 that he encouraged Page and Brin to meet with Buffett to understand how Berkshire Hathaway functioned as a holding company with strong CEOs leading its subsidiaries.

On December 3, 2019, Larry Page and Sergey Brin jointly announced their decision to step down from their respective roles at Alphabet. Despite stepping down, they remained as employees and retained the majority vote on the board of directors. Sundar Pichai, who was already serving as the CEO of Google, took over as the CEO of Alphabet while continuing in his role at Google.

In mid-2022, the firm completed a stock split, a financial maneuver that involves dividing each existing share into multiple shares. Stock splits are often undertaken to make shares more affordable for a broader range of investors.

On January 20, 2023, Sundar Pichai sent a letter to all employees announcing a significant workforce reduction. The company planned to lay off about 12,000 jobs, which constituted approximately 6% of its global workforce. Pichai explained that the decision was influenced by changes in the economic reality, noting that the company had experienced periods of dramatic growth over the past two years and had initially hired to support that growth. However, the economic conditions had shifted, leading to the need for a workforce adjustment.


Alphabet Inc. The statement “serves as the parent company for a diverse set of subsidiaries”. As of September 1, 2017, the equity of these subsidiaries is held by XXVI Holdings, Inc., a subsidiary named after the Roman numeral 26 (the number of letters in the alphabet). This arrangement allows for the separate valuation and legal distinction of these subsidiaries from Google. Concurrently, Google underwent a reorganization and became a limited liability company known as Google LLC.

Eric Schmidt, in 2015, mentioned the possibility of having more than 26 Alphabet subsidiaries. He indicated ongoing meetings with the CEOs of both existing and proposed subsidiaries, suggesting further expansion.

While many companies or divisions that were originally part of Google became subsidiaries of Alphabet, Google continues to serve as the umbrella company for Alphabet’s Internet-related businesses. This includes well-known products and services like the Android mobile operating system, YouTube, and Google Search.

Former subsidiaries of Alphabet include Nest Labs, which merged into Google in February 2018, and Chronicle, which merged with Google Cloud in June 2019. Sidewalk Labs was absorbed into Google in 2021 following the departure of CEO Daniel L. Doctoroff due to a suspected ALS diagnosis

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In January 2021, Loon LLC, a subsidiary of Alphabet, announced its shutdown due to a lack of a scalable and sustainable business model. In July 2021, Alphabet introduced Intrinsic, a new robotics software company spun out of X. In November 2021, Alphabet also announced Isomorphic Labs, a new company utilizing artificial intelligence for drug discovery, led by DeepMind CEO Demis Hassabis.


For the fiscal (and calendar) year 2021, Alphabet reported impressive financial results. The company achieved a net income of $76.033 billion, and its annual revenue reached $257.6 billion. This represented a notable increase of 41% compared to the previous fiscal year.

On February 1, 2016, Alphabet briefly surpassed Apple to become the world’s most valuable publicly traded company. This position was regained by Apple on February 3, 2016. Experts attributed Alphabet’s temporary loss of the top spot to Apple’s perceived lack of innovation and increased competition from Chinese companies.

In its 2017 annual report, Alphabet disclosed that a significant portion of its revenues, specifically 86%, came from performance advertising, which includes user clicks through AdSense and Google Ads, as well as brand advertising. More than half (53%) of these revenues were generated from international operations, contributing to a total revenue of US$110,855 million in 2017 and a net income of US$12,662 million.

As of 2019, Alphabet was ranked No. 15 on the Fortune 500 list of the largest United States corporations by total revenue.

On January 16, 2020, Alphabet achieved a significant milestone by becoming the fourth US company to reach a $1 trillion market value, entering the trillion-dollar companies club for the first time.

In October 2022, Alphabet faced challenges with the weakest quarterly growth and experienced a decline in sales, marking the slowest performance in nearly a decade. Contributing factors included the possibility of a global recession, the strength of the US dollar, and the ongoing impact of the COVID-19 pandemic on the economy.

Corporate Identity

Larry Page, one of the co-founders of Alphabet Inc., explained the origin of the company’s name. The choice of “Alphabet” was influenced by the fact that it represents a collection of letters that symbolize language, a fundamental innovation in human history. This connection to language is significant, considering that language is at the core of how Google indexes information through its search engine. Page also mentioned that they liked the name because “Alphabet” could be interpreted as “alpha-bet,” with “alpha” representing an investment return above the benchmark, which aligns with their goals.

In 2018, Eric Schmidt, a former executive at Google, revealed that the initial inspiration for the name “Alphabet” came from the location of the Google Hamburg office’s street address: ABC-Straße.

Alphabet chose the domain “abc.xyz” with the .xyz top-level domain (TLD), introduced in 2014. Notably, Alphabet does not own the domain “alphabet.com,” which is owned by a fleet management division of BMW. After the announcement, BMW stated that it would need to examine the legal trademark implications of Alphabet’s proposals. Additionally, Alphabet does not own the domain “abc.com,” which is the domain of the Disney-owned American Broadcasting Company.

Lawsuits And Controversies

Waymo vs. Uber (2017-2018): In 2017, Alphabet Inc. filed a lawsuit against Uber over alleged theft of self-driving car technology. Waymo, Alphabet’s autonomous vehicle division, claimed that a former engineer had downloaded and stolen around 14,000 documents before joining Uber. The lawsuit was settled in February 2018, with Uber agreeing not to use the disputed self-driving technology and providing Waymo with a 0.34% equity stake, valued at around $245 million.

Google+ Privacy Bug Lawsuit (2018-2020): In October 2018, a class-action lawsuit was filed against Google and Alphabet regarding a privacy bug in Google+ that exposed non-public user data. The bug allowed app developers to access users’ private information. The lawsuit was settled in July 2020 for $7.5 million, with claimants receiving at least $5 each (up to a maximum of $12).

Antitrust Lawsuit by the U.S. Department of Justice (2020): In October 2020, the United States Department of Justice filed an antitrust lawsuit against Alphabet, alleging anti-competitive practices. The lawsuit focused on Google’s dominance in online search and advertising. The case aims to address concerns related to competition and consumer choice.

National Labor Relations Board Complaint (2020): On December 2, 2020, the National Labor Relations Board filed a complaint against Alphabet Inc., accusing the company of unlawful monitoring and questioning of several workers at Google. The complaint also alleged that Google fired employees for attempting to unionize and protesting company policies. Alphabet Inc. denied any wrongdoing, stating that it acted legally.

Antitrust Settlement in France (2021): On June 7, 2021, Alphabet Inc. settled an antitrust suit with the French Autorité de la concurrence by agreeing to pay $270 million. The settlement, amounting to less than 0.7% of Alphabet Inc.’s yearly earnings, resolved concerns related to Google’s advertising practices in the French market.

Japan Antitrust Probe (June 2021): On June 12, 2021, it was announced that Japan would launch an antitrust probe into Alphabet Inc. (Google) and Apple Inc. The investigation aimed to determine whether the dealings of these tech giants with Japanese smartphone makers violated existing antitrust measures or if new regulations were necessary.

Google’s Bank Account Seized in Russia (May 2022): In May 2022, Russian authorities seized Google’s bank account in Russia. This action led to Google filing for bankruptcy a month later, citing an inability to pay vendors and staff. Despite the financial challenges, free services such as Google Search, YouTube, Gmail, Maps, Android, and Play were stated to remain available.

Mass Layoffs and Employee Criticism (2023): In 2023, Alphabet Inc. faced criticism for conducting mass layoffs without informing employees in advance. Many long-tenured and recently promoted employees reportedly discovered that they had been terminated when they were unable to access their accounts. This information was confirmed through news articles discussing the widespread layoffs. The incident sparked negative reactions on social media, with affected Google employees expressing their dissatisfaction with the lack of prior notification.

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