Google appoints new CEO in major overhaul

Last Updated Aug 10, 2015 6:11 PM EDT

Google (GOOG) is splitting its search, YouTube and some other Web entities from its research and investment units, the company said in a blog post on Monday.

"Google is not a conventional company. We do not intend to become one," Larry Page wrote in the post, reiterating what he and co-founder Sergey Brin said in their original founders letter 11 years ago.

As part of the restructuring, Google become part of a new holding company dubbed Alphabet, which will also include YouTube, Android mobile software and other Web-based products. Among the other business units to be grouped within Alphabet will be Calico and Google X, which both focus on R&D for the search giant; Google Ventures; and Google Capital.

Investors have urged Google to be more transparent about its R&D spending, and the holding company structure should offer more visibility into the company's priorities.

Page will take the helm as chief executive of Alphabet. Brin will serve as president, Google chief financial officer Ruth Porat will retain that title and former chief executive Eric Schmidt will be executive chairman. Page's deputy, Sundar Pichai, is getting kicked up the corporate ladder to become CEO of Google.

The moves come as Google tries to differentiate between its core business and other areas the company is exploring longer term, such as health care and driverless cars.

"We've long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes," Page wrote in the post. "Our company is operating well today, but we think we can make it cleaner and more accountable."

"Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights," Page added. "Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG."

Shares of Google jumped nearly 7 percent in after-hours trading. The stock has risen 25 percent in 2015, with a large chunk of those gains coming after Google reported quarterly earnings in July.

The changes unveiled Monday will be phased in over coming months, with Alphabet reporting earnings under the new structure beginning when it reports fourth-quarter results, which have typically come in January.

"This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google," Page said.