Alphabet CEO Larry Page announced Tuesday that he will step down from the position. Google CEO Sundar Pichai will take over as CEO of the parent company in addition to his current role. Co-founder Sergey Brin will also step down as president of Alphabet and the role will be eliminated.
Alphabet’s stock was up as much as 0.8% after hours.
“With Alphabet now well-established, and Google and the Other Bets operating effectively as independent companies, it’s the natural time to simplify our management structure,” Page and Brin wrote in a blog post announcing the change. “We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two CEOs and a President.”
Page became CEO of Alphabet in 2015 when Google reorganized to form the new parent company to oversee its “Other Bets” outside of its main search and digital ads businesses. Page had previously served as CEO of Google. Under the new structure, Pichai became CEO of Google after effectively running much of the business as Page had taken a step back to focus on big picture endeavors. Pichai had previously led Android and Chrome at the company.
WATCH NOWVIDEO07:46Larry Page to step down as Alphabet CEO, Pichai to take over
Both Page and Brin will remain “actively involved” as members of Alphabet’s board, according to the letter. The co-founders still have controlling voting shares of the company. Page holds about 5.8% of Alphabet shares, Brin controls about 5.6% and Pichai holds about 0.1%, ensuring the new CEO may still be challenged by the company’s founders. Google said its voting structure is not changing in light of the announcement.
Alphabet may need to lean more heavily on its other bets, which include companies like Waymo and Verily, as its core digital advertising business run by Google shows signs of slowing down. Google showed slowing ad revenue in its first quarter of 2019 and lower profit compared to the previous year during the third quarter. The company has still struggled to generate significant revenue in hardware, although its cloud business is growing. (READ MORE)