Google has restructured to create a new holding company called Alphabet, separating its core web advertising business from newer ventures like driverless cars.
The planned structure resembles that employed by General Electric, with a central unit handling corporate-wide activities such as finance and relatively independent business units focused on specific areas.
Analysts have interpreted the move as an attempt to focus on some of its more ambitious projects in areas such as wearable devices, driverless cars, home automation and Internet connectivity.
"They are aware that they've got this hodgepodge of companies," said Roger Kay, an analyst at Endpoint Technologies Associates. "Maybe it's better to sort them out a bit and make it clearer which ones are bringing in the bacon and which ones are science projects and which ones are long-term bets."
Alphabet will replace Google as the publicly traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all the same rights. Under the new corporate structure, the Google unit will encompass the core search engine as well as Google Maps and YouTube.
Google X, a secretive lab that focuses on moonshot projects like the Google Glass wearable device, driverless cars and Project Wing delivery drones, will be managed separately, as will newer ventures such as Calico, which focuses on longevity, and connected home products maker Nest.
Other units that are part of the new structure include Fiber, for its high-speed Internet efforts, venture capital arm Google Ventures, and Google Capital, which invests in larger tech companies.
"This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google," Larry Page, the current CEO of Google who will become CEO of Alphabet, said in a blogpost.
Analysts said the new structure should give Wall Street better insight into Google's investment in its disparate subsidiaries and may herald a new era of fiscal discipline and transparency in some of its more experimental and opaque business units.
Little is likely to change in terms of those at the top however. Google co-founder Sergei Brin will become president of Alphabet, and Eric Schmidt, chairman of Google, will be executive chairman. The company's current directors will become directors of Alphabet.
Ruth Porat, who joined Google as its chief financial officer in March from Morgan Stanley, will serve as CFO of both Alphabet and Google and with Page heading up Alphabet, Sundar Pichai, a long-time Google executive who most recently served as the company's senior vice president of products, will head Google.
In a filing with the Securities and Exchange Commission, Google said the new arrangement will take effect later this year and that it is likely to result in two reportable, financial segments.
Analysts said the move could be followed by more structural changes in the future. "This may be step one of several steps," said Morningstar analyst Rick Summer.
Google Alphabet infographic