Google's Alphabet move allows company to target healthcare

Calico, Google X and Google Ventures, all with significant healthcare focus, will become separate units under Alphabet.

Google has created a new parent company, Alphabet, and the move could have big implications for its healthcare business.

Alphabet will be the parent company presiding over distinct entities, of which Google is to be the largest initially.  Google co-founders Larry Page and Sergey Brin will be Alphabet CEO and president, respectively.

"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related," Page wrote on the company's blog.

Page pointed to life sciences projects, such as glucose-sensing contact lenses, and Calico as examples; Google describes Calico as a company targeting health and illness. Both will be under Alphabet, as will Google Ventures and Google X.

Google X is the bed of many blue-sky projects, Google Glass started there, and the unit is also where Google is conducting the Baseline Study to better understand the human body that it announced in July 2014. The search giant has been ratcheting up its financial investments into healthcare, which consumed more than a third of its total Google Ventures investments in 2014. Google, in fact, was part of a deal $120 million funding deal for Editas Medicine to create technology capable of "editing" the human genome.

Page did not mention Google Glass, specifically, but it has gained purchase in healthcare and, in fact, a study published this week found that it could save lives in the emergency departments of hospitals.

Page also announced that as he and Brin step into Alphabet, Sundar Pichai will be the new CEO of Google.

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

As for its stock, the company will retain its listings.

"Alphabet Inc. will replace Google Inc. as the publicly-traded entity and all shares of Google will automatically convert into the same number of shares of Alphabet, with all of the same rights. Google will become a wholly-owned subsidiary of Alphabet. Our two classes of shares will continue to trade on Nasdaq as GOOGL and GOOG," Page said.

Twitter: @HFNewsTweet