Investing.com - Technology giant Google announced late Monday that it is creating a new organizational structure under a newly formed umbrella company called "Alphabet".
The creation of Alphabet will allow Google to separate its core web advertising business from newer ventures, such as research arm X Lab, investment unit Google Ventures and health and science operations.
Google co-founder and Chief Executive Larry Page will serve as Alphabet's chief executive officer, while fellow Google co-founder Sergey Brin will serve as president.
Eric Schmidt, chairman of Google, will be executive chairman, while Ruth Porat will serve as chief financial officer of both Google and the entire Alphabet company.
Google’s current vice president of products Sundar Pichai will take over the CEO role at Google, which will turn into a subsidiary of the new holding company. According to a regulatory filing, the Google unit will include search and search ads, maps, apps, YouTube, Android and related technical infrastructure.
The current board of directors of Google will become board of directors of Alphabet following the reorganization.
The new corporate structure is said to be similar to conglomerates such as Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) or General Electric (NYSE:GE), which own a number of diverse holdings and hold stakes in several others.
According to market analysts, the move could mean that Google, or Alphabet for that matter, will look to spin off fast-growing businesses such as YouTube, or acquire other companies, like Twitter (NYSE:TWTR).
"Our company is operating well today, but we think we can make it cleaner and more accountable," Page said in Monday's announcement.
"Alphabet Inc. will replace Google Inc (NASDAQ:GOOGL). 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 shares jumped 5.75% in pre-market hours, adding more than $25 billion to its market value.