Google Inc. Creates Subsidiary Company

Google Inc. Creates Subsidiary Company

Google Inc. Creates Subsidiary Company

Google Inc. has created a new holding company called Alphabet. Now Alphabet will be the main company and Google its subsidiary. Alphabet has been created to help Google oversee its new businesses in the field of Internet access and health among other entities the largest of which will be Google. It will also oversee other subsidiaries such as YouTube, Calico, Google Ventures, and Google X among others.

Alphabet will give clear clarity as concerns how Google invests money in its diverse ventures in health-related technology, driverless car technology and high-speed internet services. Investors have been worried about how Google has been spending its fortune from search engine success on new ventures. Google will now give clarity on how these ventures are being run through Alphabet.

Investors Happy with Alphabet but is the Name Exclusive?

The creation of Alphabet has been championed by many and has a good effect on Google’s shares on Wall Street. The new structure of Alphabet Inc. will be introduced in phases, and the new company will give its results in the fourth quarter report released during the beginning of the year. Investors that own Google shares need not worry because their shares will be automatically converted into Alphabet shares. The conversion of Google shares into Alphabet Inc. shares will not lead to extra taxes or a shareholder’s vote. The shares will continue to trade as GOOG and GOOGL.

There have been some question marks regarding the name chosen by Google execs Sergey Brin and Larry Page for their new holding company. The domain name alphabet.com and trademark Alphabet belong to BMW. According to reports, BMW has no interest in selling the domain and trademark names hence many are wondering how Google plans to deal with the issue. The name may also cause confusion on the stock exchange as there is already an Alphabet Fund in existence. The Alphabet name is quite common as there are many companies using the name across the US. We can only wait and see if Google sticks with the name or changes it to a more exclusive one.

Related:

http://www.wsj.com/articles/google-creates-new-company-alphabet-1439240645

http://www.newsweek.com/google-alphabet-parent-company-361725

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