Eric Schmidt: “[Alphabet Breakup is] about as unlikely as anything I imagine”

Eric Schmidt has a message for investors who think that Google’s shift to the Alphabet(GOOG) holding company structure and businesses increasingly far afield from search indicate a future breakup- don’t hold your breath.

Schmidt, Alphabet’s Executive Chairman, spoke on the topic last week.

When asked during Bloomberg’s Breakaway Summit on Wednesday whether the multifaceted company with a plethora of projects ranging from health care to smart cities would consider a split, Schmidt was quite clear.

“The answer is never,” he said. “You never say never, but I think it’s about as unlikely as anything I imagine.”

In the summer of 2015, Google decided to form a parent company called Alphabet and set a variety of projects including Google (which would be in charge of its internet franchise), Fiber, Verily, and Nest beneath it. The move effectively divided several projects from Google, resulting in a slimmer Internet business. The “split” also allowed more management scale, so that each subsidiary could run independently with its own budget and goals.

This new model makes all the difference, Schmidt said.

“Our architecture allows for expansion,” he continued. “The model is incredibly expandable, and the CEOs are highly independent and heavily incentivized to deliver real value and shareholder value, and I don’t see any reason to break it up.”

Look elsewhere, spinoff fans.

Disclosure: The author holds no position in any stock mentioned




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