Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is under new management. Co-founders Larry Page and Sergey Brin have relinquished their titles and job functions as CEO and president, respectively, of the technology holding company. In their place, Google CEO Sundar Pichai assumed the role as CEO of both Alphabet and Google.
What’s new? What’s not?
Brin and Page dropped their executive titles immediately, just after the closing bell on Tuesday. That’s also when Pichar assumed his new duties, which effectively boil down to managing Alphabet’s “other bets” division.
The co-founders aren’t cutting all of their cords to the empire they built, however. Both Page and Brin will keep their board seats, and the pair still controls 51.3% of Alphabet’s voting stock. If they ever saw a need to step back into executive roles within the company — or to make any strategic decision within the scope of the board’s powers — they have the votes required to make it happen.
Pichai isn’t exactly a spring chicken around the Googleplex, either. He has been working with Google and Alphabet for 15 years, covering most of the company’s 21-year history. As CEO of the Google division, he has managed the vast majority of the company’s operations since 2015.
Should investors worry about this change?
Honestly, nothing much has changed. As a longtime Alphabet shareholder myself, this announcement ranks somewhere around “it’s warm in Florida today” in terms of surprise value.
Google is pretty much synonymous with Alphabet today. “Other bets” may be the key to this company’s long-term future, but it accounted for just $155 million of Alphabet’s third-quarter revenues. The remaining $40.3 billion came from Pichai’s Google segment, which works out to 99.6% of the company’s total sales. Boosting Pichai’s workload with the remaining 0.4% sliver shouldn’t make much of a difference.
It’s true that Pichai now steps out from Page’s shadow in many ways, but he has actually been performing a lot of Page’s technical duties for years anyway. For example, Pichai routinely answers analyst questions on Alphabet’s earnings calls. Larry Page hasn’t made a single appearance on these calls in the last two years — maybe more.
In other words, the new boss should look and feel a lot like the old boss — only the official job titles have changed. Alphabet remains as safe as houses in Pichar’s experienced hands, and it’s still one of the top stocks to buy right now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A and C shares). The Motley Fool has a disclosure policy.