Alphabet Spells Early Success For Google Stock
MOUNTAIN VIEW (CBS SF) - Google's surprising reorganization is receiving cheers on Wall Street (GOOG).
Google's brand will become a subsidiary under newly-created parent company Alphabet, while Google's self-driving cars, home automation systems and other experimental projects are separated from Google.
Analysts with Stifel Nicolous, Susquehanna, BMO Capital and others are issuing positive client notes on the move, citing among other things improved financial accountability.
BMO's research note says the move doesn't break out YouTube separately from Google as many have been calling for, but says the move has addressed the broader interest in better understanding Google's different components.Google has been criticized by shareholders for its R&D spending on projects away from its core business. With digital advertising having peaked, Google is clearly looking for future avenues of business away from search.
Larry Page will be the CEO of Alphabet, and fellow co-founder Sergey Brin its president. Sundar Pichai, who last fall was put in charge of Google's core products, is now the CEO of Google.
Google, which will eventually trade under Alphabet, surged higher on the news Monday.