presentation about demerger between google & alphabet

1. S
GOOGLE
Demerge
ALPHABET AND IT‘s
FUTURE
Submitted to :- Prof. Renu Singh
Submitted by :- Md Wasim Ansari

2. • A part of existing company - a new company - which
operates separately
• Shareholders of original company get equivalent stake in
new company
• Segments operate smoothly and focus on specific task
• Reasons for demerger:
 to concentrate on core activities
 to comply with the laws & regulations of the place where it wants to establish its
presence
 division reached a point where it would be more profitable for it to become a
separate entity
 parent company changing direction so division spun off so that division can meet
needs of existing clients and parent can focus on new markets
 basic idea – demerger will prove beneficial to all parties concerned
Demerger

4. Reasons for demerger:
(1)Corporate attempt to adjust to changing economic and political
environment of the country;
(2)To correct the previous investment decisions where the company
moved into the operational field having no expertise or experience
to run the show on a profitable basis;
(3)To help finance an acquisition;
(4)To realize capital gains from the assets acquired at the time when
they were under performing and now no better performance,
capital gain can be realized;
(5)To make financial and managerial resources available for
developing other more profitable opportunities;
(6)Selling unwanted and surplus or unconnected parts in the
business as a restructuring strategy to get rid of sick part of the
company.

5. Benefits
 Greater flexibility
 Adopt independent capital structures
 Greater investment choice for shareholders
 Closer Alignment
 Driving accountability

6. A Brief History of Google
• Google's mission is to organize the world's
information and make it universally accessible
and useful
• 1996 Search Engine created as research project
by Larry Page and Sergey Brin at Stanford
University
• 1998 Incorporated as a privately held company
• 1999 Offered for sale to Excite for $1 million,
Excite turned down the offer
• 2000 AdWords released as Google’s advertising
plaYorm
• 2004 IPO, market capitalization of more than $23
billion

7. Why Restructure
into Alphabet?
• Getting more ambitious things done
• Taking the long-term view
• Empowering great entrepreneurs and companies to flourish
• Investing at the scale of the opportunities and resources we see
• Improving the transparency and oversight of what we’re doing
• Making Google even better through greater focus
• And hopefully…as a result of all this, improving the lives of as many
people as we can
- Alphabet Inc. CEO Larry Page

8. The Structure of a “Simple”
Corporate Restructure
• Alphabet was created as a subsidiary directly owned by
Google Inc., with Google as the owner and Alphabet as
the subsidiary. Afterwards, the roles were reversed in
a two-step switch:
– First, a dummy subsidiary of Alphabet was created.
– Google then merged with the new dummy subsidiary while converting
Google stock to Alphabet stock. The post-merger subsidiary, no longer a
dummy, changed its name to "Alphabet Inc." The corporate reorganization
was done without a shareholder vote, which is allowed under Delaware
law.
• The restructuring process was completed on
October 2, 2015. Alphabet kept Google Inc.'s stock
price history and continues to trade under Google
Inc.'s former ticker symbols "GOOG" and "GOOGL;"
both classes of stock are components of major stock
market indices such as the S&P 500 and NASDAQ-
100.

9. Results of the Restructure
• Made it easier for investors to track the revenue from
Google vs the other divisions of Alphabet
• Earnings divided into two main categories
– Google: Search, Ads, Commerce, Maps, YouTube, Apps, Cloud,
Android, Chrome, Google Play and hardware products, such as
Chromecast, Chromebooks and Nexus
– Other Bets: Google Fiber, Calico, Nest, Verily, GV Google Capital, X
and other initiatives
• First financial report after restructure
– Alphabet total fourth quarter revenue $21.33 billion
– Google division $21.178 billion revenue
– Other Bets $448 million revenue and $3.6 billion operating loss
– Total 2015 revenue 74.5 billion
• Briefly became the world’s most valuable company
• $516 billion market capitalization (as of April 1, 2016) with
$73 billion in cash on hand

10. Alphabet Subsidiaries
• Calico (biotech research and development)
• Google Capital (growth equity fund)
• Google Fiber (broadband internet and
cable television)
• GV (venture capital investment)
• Jigsaw (cross-sector, inter-disciplinary
think tank)
• Nest Labs (home automation)
• Sidewalk Labs (urban innovation)
• Verily (research organization devoted to
the study of life sciences)
• X (semi-secret R&D of “Moonshots”)
• Google (Search, Ads, Commerce, Maps,
YouTube, Apps, Cloud, Android, Chrome,
Google Play and hardware products, such
as Chromecast, Chromebooks and Nexus)

13. Google Capital
• Late-stage growth venture capital fund financed by
Google, founded in 2013
• Focused on larger growth stage technology
companies
• Invests for profit, not strategic acquisitions for Google
• Additional support has included giving recipient
companies access to Google's employees and
knowledge base, with the goal of encouraging the
growth of the companies they invest in

14. Google Fiber
• Google's fiber-to-the-premises service in the United States, providing broadband
internet and cable television service
• Fiber run underground to “Google Fiber Huts”. From the “huts”, the fiber cables
travel along utility poles into neighborhoods and houses, and stop at a Fiber Jack
(an Optical Network Terminal) in each house.
• Speeds up to 1 Gigabit/s. Download high def. movie in under one minute
• Google Fiber...bar. On April Fools' Day 2012, Google released an announcement
that their product was actually an edible Google Fiber bar instead of fiber-optic
Internet broadband.
• Fiber Phone, 2016 (land line phone service)
• Announced locations:
– Palo Alto, California (limited test locations 2011)
– Kansas City, Kansas & Missouri (2011)
– Austin, Texas (2013)
– Provo Utah (2013)
– Nashville, Tennessee (2015)
– Raleigh and Durham, North Carolina (2015)
– Atlanta, Georgia (2015)
– Southern California (2015)
– Salt Lake City, Utah (2015)
– Huntsville, Alabama(2015)

15. Google Fiber Services

16. Google Fiber Example Setup

17. GV (formerly Google Ventures)
• Venture capital investment division, founded in 2009
• As opposed to Google Capital, GV provides seed, venture, and growth stage
funding to life science, healthcare, artificial intelligence, robotics, transportation,
cyber security and agriculture.
• Operates independently and makes financially driven investment decisions
• Invested in over 300 companies, including:

18. X (formally Google X-Labs)
• Semi-secret research and development subsidiary
• Projects are often referred to as "moonshots”
• Current projects in development
– Project Self-Driving Car
• Equipped a variety of vehicles with the self-driving equipment, including the Toyota
Prius, Audi TT, and Lexus RX450h. Also custom built a fleet of cars. The vehicles had
driven over 1,000,000 miles as of June 2015. Public road testing of driverless cars is
legal in California, Michigan, Florida, Nevada, Arizona, North Dakota, Tennessee,
and the District of Columbia as of Feb. 2016. Projected availability to the public in
2020.
– Project Wing
• Rapid delivery of products across a city by using drones
– Project Glass
• Augmented reality head-mounted display
– Project Loon
• Provide large scale internet access by creating a network of balloons flying through
the stratosphere
– Additional projects
• An artificial neural network for speech recognition and computer vision
• The web of things, a way of connecting real-world objects to the Internet
• Smartphone batteries that last significantly longer

19. GOOGLE

20. Thank You!