Google's parent company Alphabet has detailed how it makes decisions regarding its dozen different businesses, with India-born Sundar Pichai wielding a lot of power over the search giant, a media report has said. According to documents to the US Security and Exchange Commission (SEC), since Google blew up its corporate structure to form Alphabet in late 2015, it now separates its financials between Google and its "Other Bets".
Google's parent company Alphabet has detailed how it makes decisions regarding its dozen different businesses, with India-born Sundar Pichai wielding a lot of power over the search giant, a media report has said. According to documents to the US Security and Exchange Commission (SEC), since Google blew up its corporate structure to form Alphabet in late 2015, it now separates its financials between Google and its "Other Bets".
Other Bets currently include 11 different companies, like self-driving car unit Waymo and healthcare arm Verily, CNBC reported. Late last year, the SEC asked Alphabet for specific details around how much decision-making power Alphabet CEO Larry Page has on individual Google businesses, and the different kinds of information given to Page versus president Sergey Brin and Google CEO Pichai, among other things.
Alphabet CEO Page receives regular financial information about every Alphabet company but doesn't allocate resources to individual product areas within Google or within individual Other Bets. That hands-off relations played out dramatically in the case of Nest, the company Google acquired for USD 3.2 billion in 2014. When Nest spun-out as an Alphabet unit, the two companies had no incentive to work together and ended up building similar products. Ultimately, Alphabet decided to roll Nest back into Google earlier this month.
Pichai, 45, also does not have authority over Alphabet's overall resource allocation to Google. He has no authority over parent company's "Other Bets" nor has any decision-making power over them despite the search giant counted for all of Alphabet's profit and more than 98 per cent of its revenue in its last quarter. But Pichai has a lot of power over Google, the report said. He receives weekly and quarterly reports which include individual financial information for Google product areas, including YouTube, advertising, and hardware, and include operating results, capital expenditures, and headcount for Google as a whole.
Neither Page nor his co-founder, Alphabet President Sergey Brin, receive the weekly and quarterly reports received by Pichai, the report said. Without Page's approval, Pichai can commit Google to non-standard licensing or similar arrangements, investments, mergers and acquisitions, and other commitments up to a set dollar threshold. Also, capital expenditures, real estate, commercial arrangements, including licensing, partnership and revenue generating agreements and other similar transactions and expenditures up to a set dollar threshold.
Although Susan Wojcicki and Diane Greene both have "CEO" titles within Google, for YouTube and Cloud respectively, Pichai is the only Google executive who reports directly to and maintains regular contact with Page.
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