Google co-founders Sergey Brin, left, and Larry Page will remain directors of Alphabet and no longer oversee the company’s day-to-day operations. AP
Google co-founders Sergey Brin, left, and Larry Page will remain directors of Alphabet and no longer oversee the company’s day-to-day operations. AP
Google co-founders Sergey Brin, left, and Larry Page will remain directors of Alphabet and no longer oversee the company’s day-to-day operations. AP
Google co-founders Sergey Brin, left, and Larry Page will remain directors of Alphabet and no longer oversee the company’s day-to-day operations. AP

Alphabet’s shake-up to boost market confidence and add new synergies, analysts say


Alkesh Sharma
  • English
  • Arabic

The decision by Google parent Alphabet's co-founders to step down from day-to-day running of the firm and appoint Sundar Pichai as chief executive will boost investor confidence, calm regulatory frictions and add new synergies to the group's loss-making "other bets" venture, analysts say.

Mr Pichai was appointed as the new chief executive of Google’s parent company Alphabet on Tuesday, replacing co-founder Larry Page.  The firm's other co-founder, Sergey Brin, also stepped down from his role as the company’s president.

"Fresh senior executives are probably better suited to negotiations and to navigate the diplomatic tightrope than technology innovators," Neil Campling, co-head of Mirabaud Securities' Global Thematic Group, told The National.

This move has been “thoroughly planned and thought out”, he added, saying that with the founders stepping away “it should be much easier for Mr Pichai to make appropriate changes internally”.

The co-founders will remain directors of Alphabet. However, they will no longer oversee the company’s day-to-day operations.

The appointment of Mr Pichai has come as no surprise. He has worked at the firm 15 years and has been chief executive of Google since 2015.

Sundar Pichai is now the chief executive of Google parent Alphabet. AFP
Sundar Pichai is now the chief executive of Google parent Alphabet. AFP

More cynical observers might perceive the timing as a means of escape for both founders at a difficult time for Alphabet both internally and externally, said Matthew Kendall, chief telecoms analyst at The Economist Intelligence Unit.

"But these frictions have been brewing for quite some time, and the founders' absence at the helm means that Mr Pichai will be well aware of the challenges the company faces," he told The National.

“What has changed now, however, is that Mr Pichai will no longer adopt a caretaker role when it comes to Alphabet's future strategic direction.”

Established in August 2015, Alphabet was born out of a corporate restructuring of Google. The 21-year-old company then became a wholly-owned subsidiary of Alphabet and all of its shares were automatically converted into the same number of shares of Alphabet.

Alphabet separates Google from “other bets” that are not part of its core business. These include more than a dozen companies such as biotech firm Calico, self-driving car technology business Waymo, healthcare software company Verily, drone company Wing and investment subsidiaries GV and Capital G.

However, over the years, "other bets" has continued to weigh on company’s bottom line. In the third quarter ended September 30, "other bets" incurred an operating loss of more than $941 million (Dh3.45bn billion), whereas the core Google business remained highly profitable, generating operating income of more than $10.8bn.

Analysts say Mr Pichai's takeover could lead to a turnaround in the fortunes of the non-core businesses and also revive investors’ confidence.

"With being promoted to the top post of Alphabet, Mr Pichai would probably work on a cohesive plan for all the businesses under Alphabet to streamline policies and put out fires that the company has been in the centre of," Abbas Ali, managing editor of TechRadar Middle East, told The National.

“Without doubt … Google/Alphabet needs to take a couple of steps back to move forward.”

Google saw its slowest revenue growth in three years this year due to increased competition in advertising and stumbles in its smartphone business. The company posted $40.5bn in revenue and a net income of $7.1bn for the third quarter to September 30.

“Investors think now there is a greater chance of the other bets paying off and reaching solid financial metrics than under the direction of the founder,” said Mr Campling.

“He [Mr Pichai] has a closer attention to detail and financials and he has been responsible for deciding to shut down some previous ventures [such as the unpopular Google Glass in 2015].”

Nevertheless, industry experts say it won’t be an easy task to successfully take over the reins of Alphabet for Mr Pichai, who is credited for creating the Chrome browser and successfully taking over the Android business from its founder, Andy Rubin. A year after Mr Pichai took on Android, Google shipped 1 billion devices globally.

“His [Mr Pichai’s] decision-making and managerial capabilities will be put to the test at a time of ever-intensifying scrutiny on big tech and Alphabet's overall development,” noted Mr Kendall.

Despite stepping down, both founders still control more than 51 per cent of the company’s shares.

As of April, Mr Page held 26.1 per cent of Alphabet's total voting power, Mr Brin 25.25 per cent and Mr Pichai less than 1 per cent.

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.

The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Klipit%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Venkat%20Reddy%2C%20Mohammed%20Al%20Bulooki%2C%20Bilal%20Merchant%2C%20Asif%20Ahmed%2C%20Ovais%20Merchant%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Digital%20receipts%2C%20finance%2C%20blockchain%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%244%20million%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Privately%2Fself-funded%3C%2Fp%3E%0A
Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

Abu Dhabi World Pro 2019 remaining schedule:

Wednesday April 24: Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-6pm

Thursday April 25:  Abu Dhabi World Professional Jiu-Jitsu Championship, 11am-5pm

Friday April 26: Finals, 3-6pm

Saturday April 27: Awards ceremony, 4pm and 8pm

While you're here
Terminal High Altitude Area Defense (THAAD)

What is THAAD?

It is considered to be the US' most superior missile defence system.

Production:

It was first created in 2008.

Speed:

THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.

Abilities:

THAAD is designed to take out projectiles, namely ballistic missiles, as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".

Purpose:

To protect high-value strategic sites, such as airfields or population centres.

Range:

THAAD can target projectiles both inside and outside of the Earth's atmosphere, at an altitude of 93 miles above the Earth's surface.

Creators:

Lockheed Martin was originally granted the contract to develop the system in 1992. Defence company Raytheon sub-contracts to develop other major parts of the system, such as ground-based radar.

UAE and THAAD:

In 2011, the UAE became the first country outside of the US to buy two THAAD missile defence systems. It then deployed them in 2016, becoming the first Gulf country to do so.

The%20Roundup
%3Cp%3EDirector%3A%20Lee%20Sang-yong%3Cbr%3EStars%3A%20Ma%20Dong-seok%2C%20Sukku%20Son%2C%20Choi%20Gwi-hwa%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

Fighter profiles

Gabrieli Pessanha (Brazil)

Reigning Abu Dhabi World Pro champion in the 95kg division, virtually unbeatable in her weight class. Known for her pressure game but also dangerous with her back on the mat.

Nathiely de Jesus, 23, (Brazil)

Two-time World Pro champion renowned for her aggressive game. She is tall and most feared by her opponents for both her triangles and arm-bar attacks.

Thamara Ferreira, 24, (Brazil)

Since her brown belt days, Ferreira has been dominating the 70kg, in both the World Pro and the Grand Slams. With a very aggressive game.

Samantha Cook, 32, (Britain)

One of the biggest talents coming out of Europe in recent times. She is known for a highly technical game and bringing her A game to the table as always.

Kendall Reusing, 22, (USA)

Another young gun ready to explode in the big leagues. The Californian resident is a powerhouse in the -95kg division. Her duels with Pessanha have been highlights in the Grand Slams.

Martina Gramenius, 32, (Sweden)

Already a two-time Grand Slam champion in the current season. Gramenius won golds in the 70kg, in both in Moscow and Tokyo, to earn a spot in the inaugural Queen of Mats.