Alphabet (GOOG) announced on Tuesday that co-founders Larry Page and Sergey Brin would relinquish full control of both Google and its parent company to CEO Sundar Pichai, formally ending their reign atop one of Silicon Valley’s most powerful companies.
Citing the tech giant’s evolution from its beginnings during the height of the Internet bubble, Brin and Page — who had been serving as Alphabet’s chief executive — said that the time had come “to simplify our management structure.”
In recent years, both men have largely ceded the spotlight to Pichai, a 15-year Google veteran who has become the public face of the company since taking the reins back in 2015. The holdings of Alphabet — one of the world’s most valuable companies with a market capitalization of almost $900 billion — include YouTube and recently acquired fitness tracking company FitBit.
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“We’ve never been ones to hold on to management roles when we think there’s a better way to run the company,” Page and Brin wrote. “And Alphabet and Google no longer need two CEOs and a President,” they added.
The 46 year-old entrepreneurs wrote in a blog post that “going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets.”
The transition comes at a critical juncture for Google, which is pushing deeply into ambitious initiatives like healthcare and personal finance — but is under intensifying public pressure as data security and antitrust concerns batter the industry.
Regulators and privacy advocates are growing uneasy over the reach of big technology companies, and whether they are leveraging user data for financial gain.
Meanwhile, it was unclear whether Brin and Page — two of the last holdouts among tech founders who came age during the dotcom frenzy of the late 1990s — would divest or relinquish voting control of the company they founded. Both men will remain on the board even as they cede operational control, and retain huge influence over the company via tiered ownership stakes.
Page is one of the world’s wealthiest men, and his personal interests include renewable energy, energy-efficiency and the impact of artificial intelligence on society. He’s also an investor in Tesla (TSLA), the electric car company founded and led by Elon Musk.
Google’s stock, traded on the Nasdaq, rose modestly in after-hours trading from Tuesday’s close, to trade around $1,306.
Below is the full text of Alphabet’s blog post:
Our very first founders’ letter in our 2004 S-1 began:
“Google is not a conventional company. We do not intend to become one. Throughout Google’s evolution as a privately held company, we have managed Google differently. We have also emphasized an atmosphere of creativity and challenge, which has helped us provide unbiased, accurate and free access to information for those who rely on us around the world.”
We believe those central tenets are still true today. The company is not conventional and continues to make ambitious bets on new technology, especially with our Alphabet structure. Creativity and challenge remain as ever-present as before, if not more so, and are increasingly applied to a variety of fields such as machine learning, energy efficiency and transportation. Nonetheless, Google’s core service—providing unbiased, accurate, and free access to information—remains at the heart of the company.
However, since we wrote our first founders’ letter, the company has evolved and matured. Within Google, there are all the popular consumer services that followed Search, such as Maps, Photos, and YouTube; a global ecosystem of devices powered by our Android and Chrome platforms, including our own Made by Google devices; Google Cloud, including GCP and G Suite; and of course a base of fundamental technologies around machine learning, cloud computing, and software engineering. It’s an honor that billions of people have chosen to make these products central to their lives—this is a trust and responsibility that Google will always work to live up to.
And structurally, the company evolved into Alphabet in 2015. As we said in the Alphabet founding letter in 2015:
“Alphabet is about businesses prospering through strong leaders and independence.”
Since we wrote that, hundreds of Phoenix residents are now being driven around in Waymo cars—many without drivers! Wing became the first drone company to make commercial deliveries to consumers in the U.S. And Verily and Calico are doing important work, through a number of great partnerships with other healthcare companies. Some of our “Other Bets” have their own boards with independent members, and outside investors.
Those are just a few examples of technology companies that we have formed within Alphabet, in addition to investment subsidiaries GV and Capital G, which have supported hundreds more. Together with all of Google’s services, this forms a colorful tapestry of bets in technology across a range of industries—all with the goal of helping people and tackling major challenges.
Our second founders’ letter began:
“Google was born in 1998. If it were a person, it would have started elementary school late last summer (around August 19), and today it would have just about finished the first grade.”
Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost. 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!
With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure. We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President. Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets. We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as Board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!
Sundar brings humility and a deep passion for technology to our users, partners and our employees every day. He’s worked closely with us for 15 years, through the formation of Alphabet, as CEO of Google, and a member of the Alphabet Board of Directors. He shares our confidence in the value of the Alphabet structure, and the ability it provides us to tackle big challenges through technology. There is no one that we have relied on more since Alphabet was founded, and no better person to lead Google and Alphabet into the future.
We are deeply humbled to have seen a small research project develop into a source of knowledge and empowerment for billions—a bet we made as two Stanford students that led to a multitude of other technology bets. We could not have imagined, back in 1998 when we moved our servers from a dorm room to a garage, the journey that would follow.
Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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