Image of Google on a laptop.

Alphabet | Overview on Google's parent company

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.

Key takeaways

  • 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.

Investing with DEGIRO

We want to make investing accessible to everyone by offering incredibly low fees. For details, please visit our Fees page.

On top of low fees, we offer you access to one of the largest universes of products and exchanges. For an overview of the products and exchanges we offer, please visit our Markets page.

Open an account

The information in this article is not written for advisory purposes, nor does it intend to recommend any investments. Please be aware that facts may have changed since the article was originally written. Investing involves risks (e.g., price volatility, currency or liquidity risk We advise you to only invest in financial products that match your knowledge and experience. Past performance is not a reliable indicator of future results. Markets are volatile and can fluctuate significantly due to economic, political, regulatory, or other developments.

Sources: Investopedia, Fortune, Forbes, Statista, Macrotrends

Back

Get started with investing in 10 lessons

Investor's academy academy

Start investing today

Open an account for free invest
backtotop

Your investment journey starts here

Open an account for free and join over 2.5 million investors on our user-friendly platform.

Note:
Investing involves risks. You can lose (a part of) your invested funds. We advise you to only invest in financial products which match your knowledge and experience. This is not investment advice.

Investing involves risks.

icon_close

We want to empower people to become the best investors they can be. By offering a universe of possibilities and choices on our user-friendly platform, we are removing barriers to make investing accessible to everyone: beginners or experts. You get access to a wide variety of products on more than 50 global exchanges to have the freedom to invest the way you like. In our world, you also get great value for money. So, without compromising an inch on the quality, security and range of our investment services, we offer incredibly low fees. Prioritising your needs has helped us become the leading European online broker. Our 2.5+ million clients and 100+ international awards are proof of our success.

flatexDEGIRO Bank Dutch Branch, a foreign branch of flatexDEGIRO Bank AG | Amstelplein 1, 1096HA Amsterdam | phone: +31 20 2613072 | e-mail: clients@degiro.ie | flatexDEGIRO Bank Dutch Branch is registered with the Dutch Chamber of Commerce under number 82510245. | flatexDEGIRO Bank Dutch Branch, trading under the name DEGIRO, is the Dutch branch of flatexDEGIRO Bank AG. flatexDEGIRO Bank AG is primarily supervised by the German financial regulator (BaFin). In the Netherlands, flatexDEGIRO Bank Dutch Branch is registered with DNB and supervised by AFM and DNB. | flatexDEGIRO Bank AG is a licensed German bank supervised by the German financial regulator and registered with the German Chamber of Commerce under number HRB 105687.