Sundar Pichai's major promotion means bigger things for Google and Alphabet

Google has appointed Sundar Pichai as its CEO in possibly one of the most surprising company moves to date. In its bid to become a holding company through Alphabet, Google not only made one of the biggest promotions in its history but it has also emphasised its ambitions to become more diversified. The company has now drawn the line more clearly between its R&D efforts and its core businesses.

To further explain the company's choice, one of Google's founders, Larry Page, wrote in his memo: "As Sergey and I wrote in the original founders letter 11 years ago, 'Google is not a conventional company. We do not intend to become one.' As part of that, we also said that you could expect us to make 'smaller bets in areas that might seem very speculative or even strange when compared to our current businesses.'”

He added, "Our company is operating well today, but we think we can make it cleaner and more accountable. So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as President."

According to Forbes, it makes sense for Google to choose to become a holding company as it can help them manage its diversified units better. Alphabet gives Google an ideal position to expand into other ventures. The Internet giant has been eyeing the health care industry for quite sometime now. The site claims that Google restructuring as Alphabet will allow it to venture into such industry while assuring long-term growth.

Google's previous set-up reportedly does not emphasise or allow new waves of product development as compared to what Alphabet can do. The Internet giant operates a multitude of units, so becoming a holding company is reportedly more ideal as it gives Google the chance to organise its units better. It also allows them to align such units properly and support more growth. Dividing Google's diverse portfolio will reportedly push leaders and spinoff companies to become more particular about what happens to their bottom lines.

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