Google forms new parent "Alphabet" in restructuring

Google unveiled a new corporate structure Monday, creating a parent company dubbed Alphabet led by chief executive Larry Page, with the Internet search unit as one of several entities.

In a surprise announcement, Page said Alphabet will be the umbrella company for the tech giant`s research arm X Lab, investment unit Google Ventures and health and science operations, as well as the search unit Google, whose CEO will be current vice president Sundar Pichai.

"Our company is operating well today, but we think we can make it cleaner and more accountable," said a statement from Page, a co-founder of the tech giant with Sergey Brin.

"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."

Page said Alphabet is "mostly a collection of companies," the largest of which is Google.

Under the new structure, "this newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead."

Alphabet will be comprised of the current efforts in life sciences such as glucose-sensing contact lens and the health research firm Calico, Page said.

Page`s parent company will also include the drone delivery project Wing and investment arms of the California technology giant.

"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren`t very related," he said.

"Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed."

Alphabet Inc. will replace Google Inc. as the publicly traded entity, and all shares of Google will automatically convert to shares of Alphabet, with all of the same rights, Page said.

Google will become a wholly-owned subsidiary of Alphabet.

The reorganization comes amid concerns that Google`s dominance of the tech sector may have peaked as the landscape evolves.

Google has for years been the leader in Internet search and has turned advertising linked to those searches into a highly lucrative business.

But its shares have struggled since hitting an all-time high in early 2014 and it has little to show for ventures in other areas: self-driving cars, Google Glass, Internet balloons, health care, Google TV mobile payments, home automation and its Google+ social network, among others.