Google, Alphabet & healthcare: 7 things to know about the new conglomerate

On Monday, Google Cofounder Larry Page announced the formation of a new company called Alphabet, which will serve as the parent holding company of Google and its affiliates.

In a Google blog post, Mr. Page wrote that while Google is operating well as it currently stands, the company could be cleaner and more accountable.

"We've long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant."

Here are seven things to know about Google, Alphabet and how the new company may influence healthcare.

1. Alphabet will serve as the parent holding company of Google and all the other companies currently under Google's umbrella. By housing all Google companies (such as Life Sciences and Calico) under Alphabet, each company will run more independently with their own CEOs overseeing each business.

The slimming down of Google leaves the Internet company overseeing search functions, ads, maps, YouTube and Android.

"We believe this allows us more management scale, as we can run things independently that aren't very related," Mr. Page wrote. "Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with [cofounder] Sergey [Brin] and me in service to them as needed."

2. The separation of Google from its other ventures means those companies like Life Sciences and Calico, both of which are rooted in healthcare research, will have more potential to maximize what they do. According to a Forbes report, separating Google's portfolio incentivizes leaders of each company to be more in tune with their bottom lines.

And, while the companies now stand more on their own, Mr. Page indicated he and Mr. Brin will ensure they still receive adequate funding. "We will rigorously handle capital allocation and work to make sure each business is executing well," he wrote.

3. In the announcement of Alphabet, Mr. Page highlighted Life Sciences and Calico, healthcare-related companies now standing alone under the new holding company. Life Sciences operates as a division within Google X, a technology research lab. Life Sciences has been working with pharmaceutical giant Novartis on a smart contact lens that will help patients manage diabetes by measuring blood sugar levels through tear fluid on the eyeball. A 2014 Reuters report suggests the contact lens would be ready for the market in approximately five years, a timeline that could be shortened under the new organizational structure and concerted focus on each company.

4. Google X itself will also fall under the purview of Alphabet. Formed as Google's research arm, Google X recently has forayed further into the healthcare sphere, hiring a cardiologist from Harvard to lead its Baseline Study, according to Forbes. Jessica Mega, MD, was working with Harvard Medical School and Brigham and Women's Hospital, both in Boston. She left the East Coast for Silicon Valley to lead the study that pulls genetic data and biomarkers to understand human health on a molecular and genetic level.

5. Calico Labs, an acronym for California Life Company, is an independent biotech research and development company Google created in 2013. Calico's main focus is longevity and well-being, particularly aging and associated diseases. When Google announced the formation of Calico, TIME magazine ran a cover story asking "Can Google solve death?" which appears to be Calico's ultimate goal.

6. Google Ventures is another company that will fall under Alphabet, and this venture capital arm of Google has been increasingly shifting its focus to healthcare. A WSJ report found Google Ventures' investments in the health and life sciences peaked in 2014, at 36 percent of its total investments. That's a significant leap from the 9 percent Google Ventures invested in 2013 and 2012. Bill Maris, head of Google Ventures, told WSJ the trend would continue. "Barring some huge calamity we'll see more interesting things in life sciences in 2015," he said.

7. Mr. Page will become CEO of Alphabet, and Mr. Brin will serve as president of Alphabet. Sundar Pichai was named the next CEO of Google. He previously was product chief of the company.

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