Dive Brief:
- Google announced Monday it would create a holding company named Alphabet, which would oversee Google's widely spread entities including its healthcare businesses.
- In making the announcement, Google's CEO specifically mentioned Life Sciences and Calico as companies that would be be separated from today's Google and placed under the Alphabet umbrella.
- "This new structure will allow us to keep tremendous focus on the extraordinary opportunities we have inside of Google," CEO Larry Page wrote in a blog post announcing the change.
Dive Insight:
You read that right: Google -- or, more accurately, a slimmed-down version thereof -- will now become a subsidiary of a holding company, with other current Google components being peeled off into new entities. But what's interesting on the healthcare front is that Page called out Life Sciences and Calico, which focuses on longevity R&D.
These are not small changes, especially since Google has been a growing player in healthcare venture capital. The Wall Street Journal notes that Google Ventures spent more than of a third of its money in 2014 on healthcare and life sciences companies, or about $153 million.
"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related," Page wrote in the Alphabet announcement. Later in the same post: "This new structure will allow us to keep tremdous focus on the extraordinary opportunities we have inside of Google."
It also gives Google a way to shade some of the recent heat it's faced from critics. They claim it's been scattering around too much money in too many directions, to the detriment of investors and its core businesses. Breaking up Google into smaller bits might let investors pick and choose what parts they really want to own, including healthcare operations.