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Alphabet Inc: A New Umbrella for Every Non-Internet Google Division

Alphabet Inc. is an American multinational conglomerate and the parent company of Google and several other Google subsidiaries. Alphabet Inc. is headquartered in Mountain View, California and was created through a restructuring of Google on October 2, 2015. The two co-founders of Google remained as controlling shareholders, board members, and employees at Alphabet. Alphabet is the world’s fourth-largest technology company by revenue and one of the world’s most valuable companies.

The establishment of Alphabet Inc., according to founders, was prompted by a desire to make the core Google business “cleaner and more accountable” while allowing greater autonomy and control to group companies that operate in industries other than Internet services. 

In December 2019, founders Larry Page and Sergey Brin announced their resignation from their executive posts. The CEO position was subsequently filled by Sundar Pichai, who also doubles as the CEO of Google. However, Page and Brin remain co-founders, employees, board members, and controlling shareholders of Alphabet Inc., a role that allows them to operate in the background. 

Although many divisions that were formerly part of Google became subsidiaries of Alphabet, Google remains the parent company for Alphabet’s internet-related business divisions. These include globally used products and services associated with Google such as Android, YouTube and Google Search remained direct components of Google. 

Alphabet, like any multinational corporation, has been a subject of numerous controversies, especially lawsuits. On both the giving and receiving end, for instance, in 2017, Alphabet Inc. sued Uber over technology similar to Alphabet’s proprietary self-driving car technology. Alphabet’s autonomous vehicle technology had been under development for a decade by Alphabet’s Waymo (self-driving vehicle division). The proprietary technology is related to 14,000 documents believed to have been downloaded and stolen by a former Waymo engineer, subsequently employed by Uber. The lawsuit was settled in February 2018, with Uber agreeing not to use the self-driving technology in dispute and also agreed to provide Waymo with an equity stake of 0.34%, equating to around $245 million at the firm’s early 2018 value.

On the receiving end, a class-action lawsuit was filed against Google and Alphabet in October 2018, due to “non-public” Google+ account data being exposed due to a privacy bug that allowed app developers to gain access to the private information of users. The litigation was settled in July 2020 for $7.5 million with a payout to claimants of at least $5 each, with a maximum of $12 each.

In October 2020, the United States Department of Justice filed an antitrust lawsuit against Alphabet, alleging anti-competitive practices.

Today, Google is regarded as one of the most tech companies in the world and its numerous internet-based subsidiaries are leaders in their respective industries (operating system, email). The establishment of Alphabet Inc. is therefore an attempt by the founders to consolidate their legacies and contributions towards tech, as well as creating a clear roadmap which highlights the direction in which the company is headed for the next decade. 

Learn more about Alphabet Inc. here.


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