The company says its new structure will give more independence to many of its wide-ranging and ambitious projects.
Under the plan announced Monday, Alphabet will be comprised of the core Google business - including Internet search, mapping and YouTube - along with newer businesses that will be managed separately, such as Google Fiber, Nest and the investment arm Google Ventures.
Google CEO Larry Page will become CEO of the new entity, with his co-founder Sergey Brin serving as president. Longtime Google executive Sundar Pichai, who has taken on increasingly important roles at the company in recent years, will be CEO of the core Google business.
The change may give investors a clearer picture of how much Google is spending on some of its newer ventures, like its effort to build a self-driving car, develop a glucose-sensing contact lens or install high-speed Internet fiber networks in a number of U.S. cities, said Colin Gillis, an investment analyst at BGC Partners.
But it may not signal much change in the current management structure, since Pichai has already been overseeing many of Google's core operations, Gillis said.
Google Inc. said its new chief financial officer, Ruth Porat, will hold the same title for both Google and Alphabet. Once the reorganization is complete, the company says its two existing classes of publicly traded stock will continue to trade on the Nasdaq exchange under the ticker symbols "GOOG" and "GOOGL."
The Mountain View, California, company's stock was up about 5 percent in after-hours trading following the announcement Monday afternoon.
A is for Alphabet— Alphabet Inc. (@aIphabetinc) August 10, 2015
Google is not a conventional company. We do not intend to become one. https://t.co/IgFi2DYn7H— Alphabet Inc. (@aIphabetinc) August 10, 2015
Hello, world!— Alphabet Inc. (@aIphabetinc) August 10, 2015