Alphabet is a multinational conglomerate and the parent company of Google. Established in 2015 as part of a corporate restructuring, Alphabet was created to separate Google's core internet services from its other ventures.
Prior to the formation of Alphabet, Google operated as one entity overseeing various projects and initiatives. However, as the company expanded into new industries beyond its core search engine business, it became necessary to establish a more structured framework.
1995 – Google founders Larry Page and Sergey Brin meet at Stanford University where they begin working on a search engine called Backrub, which later becomes Google.
1998 – Andy Bechtolsheim issues a $100,000 check and Google took its first breath. With the money, the founders open their first office in Susan Wojcici’s (former CEO of YouTube) garage in California.
2000 – Google becomes Yahoo’s search engine provider, which lasts four years. It also launches ‘Doodles’, which are the illustrative changes made to Google’s logo on its homepage for different occasions.
2004 – Google launches its initial public offering (IPO) with a stock price of $85.
2006 – Google acquires YouTube and also launches Google Docs and Spreadsheets.
2008 – The first smartphone to launch Android hits the market and Chrome becomes available.
2015 – Google reorganises into Alphabet, Inc., which is a holding company of which Google is just a division.
2023 – 25 years of Google.
What is Alphabet Inc.?
In 2015, Google restructured its company creating a new parent company, Alphabet Inc. Alphabet describes itself as a collection of companies. In the 2015 Founders’ Letter, Page said that Google was operating well, but created Alphabet to make the company cleaner and more accountable. By separating Google's core internet services from its other ventures, Alphabet aimed to foster innovation and provide more transparency into the performance of individual businesses. They wanted to be able to operate in different sectors and believe that the creation of Alphabet allows them to run things independently that aren’t closely related. This structure also allowed Alphabet to allocate resources strategically based on the needs of each subsidiary. Alphabet operates as a holding company with several subsidiaries under its umbrella. The most prominent subsidiary is Google, which includes various products and services such as search, advertising, YouTube, Android and more.
What companies does Alphabet own?
Alphabet owns a diverse portfolio of companies across industries such as technology, healthcare, biotechnology and home automation. Some of the key players currently under Alphabet are:
X: A subsidiary of Alphabet that aims to tackle major global challenges through technological innovation. Some of X's notable projects include self-driving cars (Waymo), internet-beaming balloons (Project Loon) and delivery drones (Wing).
Mandiant: A company that focuses on cybersecurity testing and cyber-incident response. It’s been part of Google since 2022, and it was acquired for $5.4 billion.
YouTube: The video platform was acquired by Google in 2006, and it contributes significantly to the company’s revenue thanks to its premium subscriptions. In 2021, the ad revenue was $28.9 billion.
Verily Life Sciences: An Alphabet subsidiary focused on healthcare and life sciences research. Areas of interest include precision medicine, clinical research and health data analytics.
Looker: The video platform was acquired by Google in 2006, and it contributes significantly to the company’s revenue thanks to its premium subscriptions. In 2021, the ad revenue was $28.9 billion.
Nest Labs: A home automation company acquired by Google in 2014 that later became an independent subsidiary under Alphabet. Nest offers a range of smart home products, including thermostats, cameras, doorbells and security systems.
DoubleClick: A leading online advertising platform that provides solutions for advertisers, publishers and agencies. It focuses on delivering targeted and data-driven advertising campaigns. The company was acquired by Google in 2008 for $3.1 trillion, but in 2018, Google incorporated it into the Google AdWords brand, making Google Ads the main tool for advertisers.
Fitbit: A company that makes wearable products (including smartwatches and armband fitness trackers) to improve users’ health and fitness. The company was acquired by Google in January 2021 for $2.1 billion.
Calico: A biotechnology company specialising in age-related diseases and human longevity.
DeepMind Technologies: An artificial intelligence research lab that uses deep reinforcement learning (Deep RL) to create smart solutions.
Revenue by region
In their financials, Alphabet breaks down their revenue by region including the United States, Other Americas, APAC and EMEA. At the end of Q3 2023, the company saw revenues of over $76.69 billion, a 11% increase year-over-year. In 2022, 47% of the revenue came from the US, which may be surprising since Google alone is active in 50 different countries. The second largest sector in terms of revenue was EMEA at 29% followed by APAC and Other Americas, representing 16% and 6% respectively.
Alphabet Inc. stocks (GOOG)
Alphabet trades on the Nasdaq under the two tickers GOOG and GOOGL. Shares that trade under the ticker GOOGL are categorised as Class A and GOOG shares are categorised as Class C. There are also Class B shares, however these are held by founders of the company and are not publicly traded. The main difference between the different classes is in terms of voting rights. Class A shares receive 1 vote, Class B shares receive 10 votes and Class C shares receive 0 votes. The Class A and C shares were created from a stock split in 2014. The reason for the split was so that Page and Brin could preserve control of the company.
- Alphabet is a multinational conglomerate and the parent company of Google. It was created to separate Google's core internet services from its other ventures.
- Alphabet owns a diverse portfolio of companies across industries such as technology, healthcare, biotechnology and home automation.
- At the end of Q3 2023, Alphabet saw revenues of over $76.69 billion. The company trades on the Nasdaq under the two tickers GOOG and GOOGL.
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