It is a $29bn org chart. If Googleexecutives mapped out their new corporate structure on something as antediluvian as a white board, they could stick a gold frame around it.
Google’s shares rose by that amount, or 7 per cent, in after-hours trading on Monday when the company revealed it was creating a new holding company called Alphabet, with subsidiaries ranging from the core search and advertising business to Nest, which makes thermostats, Fiber, the high-speed internet provider, and Calico, the biotech company.
At first sight, this is absurd. The balance sheet and cash flows will be unchanged. Larry Page, chief executive, calls it “cleaner”. The risk is it creates a mess, particularly in human resources. Even the top team is not exactly streamlined. Mr Page, Sergey Brin and Eric Schmidt move from Google to Alphabet, but Sundar Pichai moves from head of Google products to become chief executive of Google, and Ruth Porat, chief financial officer, will be CFO of both Alphabet and Google.