The inside story of why Google is becoming Alphabet now

The announcement of Google’s new holding company, Alphabet, initially led to near-universal bafflement among the tech cognoscenti: why would Google, an industry leader, create such upheaval?

The most immediate benefit may simply be that CEO Larry Page, who is stepping away from day-to-day management, can spend more time playing with Legos.

Even in the early days of Google, cofounders Page and Sergey Brin would let their minds wander to other seemingly impossible projects beyond the already ambitious task of building a search engine to change how millions use the Internet.

“Larry and Sergey were using Legos to try to figure out how to automate the turning of book pages in the first months of Google. For the life of me, I couldn’t imagine why,” Heather Cairns, one of Google’s first 10 employees who led human resources in the beginning, recalled in an interview this week withMashable. It turned out their goal was to scan the world’s books. “Building a space tether to propel people into space inexpensively was also an ambition.”

“They are inventors first and entrepreneurs by default,” Cairns adds.

Nearly 17 years after founding Google, Page and Brin remain as ambitious as ever, if not more so. Yet, the day-to-day management demands of running Google, essentially an elaborate $400 billion advertising business, increasingly weighed on Page in particular.

To fix that problem, Page announced on Monday the creation of Alphabet, with Google as one of its subsidiaries, along with Nest for smart home products, Calico for life extension research, Google X for the company’s mysterious moonshot ideas and two venture capital arms. Buried in that announcement: Page has abdicated the role of Google CEO to deputy Sundar Pichai and will instead serve in the more amorphous role of Alphabet CEO.

The high-profile structural change may offer many benefits to Google: more C-suite opportunities and autonomy to prevent promising executives from leaving; an improved organization for acquiring multi-billion dollar businesses; more transparency for Wall Street about Google’s many varied investments.

And for Larry, a chance to turn the page.

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