Google just announced a big restructuring of the company, sending shares up about 6 percent in extended trading. After the announcement, shares of Google rose 5 percent, but have since risen even further.
As part of the restructuring, Larry page is now the new CEO of a parent company called Alphabet, while Sundar Pichai will be CEO of Google. According to a regulatory filing, Google’s business will include “search, ads, maps, apps, YouTube and Android and the related technical infrastructure.”
Clearly, investors like the move. Google, which basically prints money with its advertising business, has seen its revenue growth somewhat slow down. So a shakeup seems like a welcome change to investors for the company, which is looking for the future of its business with projects that go beyond its search business.
As part of the restructuring, it’ll theoretically also be easier to track which parts of Google’s business are making money and which aren’t. Google beat analyst expectations in its previous earnings report, promptly sending the stock up 8 percent, and in the past month or so, Google’s share price has risen more than 20% including today’s jump.
With that jump in the company’s shares, Google added more than $20 billion to the company’s market cap.
Google co-founder Sergey Brin is now president of the new company, as well. The rest of the company’s businesses, like Calico, Nest and Fiber and its investing activities, are now managed separately from Google’s business.
Update: Shares of Google are now up about 6 percent in after-hours trading. Shares rose as much as 7 percent a few hours after the announcement.