In a sudden announcement Sundar Pichai, Google CEO, has just in the last few hours been given control of Alphabet. What has happened to cause co-founders Larry Page and Sergey Brin to step back, and what power does Pichai now wield?
Alphabet – the ABC’s
Alphabet was created during Google’s restructure in 2015. It is the parent holding company of Google as well as some previous subsidiaries.
Larry Page and Sergey Brin co-founded Google 21 years ago in 1998. The giant tech firm now employs over 100,000 people and provides hugely popular services and systems including YouTube, Gmail and Android to name but a few.
Until last night, Page and Brin have remained at the helm, respectively as CEO and President of Alphabet.
Sundar Pichai joined Google in 2004 and has since risen through the ranks starting out as VP of Product Management. Pichai is now the CEO of both Google and of Alphabet.
What has happened to the original co-founders?
Page and Brin have always notoriously shied away from the limelight. They aren’t relinquishing all involvement in Alphabet and according to the press release will ‘remain active as co-founders, shareholders and board members‘.
In their blog ‘A letter from Larry and Sergey’, the empire co-founders explain that:
‘While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents—offering advice and love, but not daily nagging.’
Is this really such a big shock?
Well, it wasn’t exactly expected! The two university students founded one of the biggest corporations the world has ever seen. But then they have never been fond of publicity, and indeed there has been talk of a ‘power vacuum’ created due to their lack of public engagement.
When CNBC reported on the crises facing Alphabet last year, one of the key notable points was a lack of contribution from the co-founders.
CNBC report that Page stopped taking earnings calls in 2013. He has not given a keynote speech at the corporation’s annual developer’s conference in (now) seven years. They say that ‘he barely speaks to the press or talks in public’.
I think it is a little sad to have the founders give up control so suddenly. Perhaps they really have just tired of the responsibility. It will be interesting to see how they turn their collective genius back to what they do so well.
What happens now?
In the statement, the Chair of the Board of Directors at Alphabet, John Hennessy, acknowledges the ‘contributions’ of Page and Brin. I’ve got to say that this doesn’t sound like a strong enough word.
Hennessy says, ‘It’s impossible to overstate Larry and Sergey’s contributions over the past 21 years. I’m grateful that they will continue their involvement on the Board.’
Pichai now takes over as the CEO both of Google and of Alphabet. Google is worth around $300 billion. Alphabet is currently worth $899.41 billion. How the stock markets will react to this news we don’t yet know.
This makes Pichai the CEO of corporations worth collectively around $1.2 billion. Is it possible that Google and Alphabet have simple outgrown their founders?
It might be the right time for change. Google has battled lots of troubles in recent times. We reported on the internal problems, with the sacking of employees associated with unions. This has prompted staff protests and walk-outs.
Google has a serious problem with leaks, and Pichai decided to cancel internal meetings to prevent this.
Is Pichai the right man for the job?
Alphabet thinks so, and let’s wait and see if they are right!
In the press release, Pichai says, ‘I’m looking forward to continuing to work with Larry and Sergey in our new roles. Thanks to them, we have a timeless mission, enduring values, and a culture of collaboration and exploration. It’s a strong foundation on which we will continue to build‘.
Still, it feels a bit like paying lip service. I know that Page and Brin aren’t shining public figures, and we don’t hear much either from or about them. I acknowledge that they don’t appear to be at all philanthropic despite their enormous personal fortunes.
However, announcing such a fundamental change in an organisation which plays a huge role in the lives of millions of people through press releases and blog posts feels – well, a bit impersonal to me. And perhaps that is exactly the point.
What do you think of this news? Is it the right time for the Google co-founders to step away from the parent company? How do you think this will change the future for Google? Let us know!