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Alphabet will be fine without Larry Page and Sergey Brin: analysts

Brooke DiPalma
Associate Producer

Alphabet (GOOG) co-founders Larry Page and Sergey Brin are stepping down from their executive roles at the company and Google CEO Sundar Pichai is taking over as the CEO of Alphabet. Despite the change, multiple analysts told Yahoo Finance investors shouldn’t worry.

“He's [Pichai] a long-standing executive with the company. And I think that's important,” D.A. Davidson senior research analyst Tom Forte told Yahoo Finance. “Look at some of these long-term bets that they've made. They actually beat Amazon (AMZN) on the first commercial drone delivery, which was Google, and not Amazon, with Walgreens (WBA). And I think you're starting to see some traction on the self-driving car front.”

TECHnalysis Research President and chief analyst Bob O'Donnell agrees.

“I don't think this is much of a change really. Sergey and Larry have both been pretty much out of the picture for a while.” O’Donnell said. “You've got the gentleman who's been running the largest part of that organization, Sundar, who's been doing a fantastic job, simply moving in to take that role. Philosophically, it's sort of an end of an era, right, because this was the last, arguably, of the big early day dot coms where the founders are finally stepping away.”

Although Page and Brin are departing from their posts, both will remain on the company’s board and the two largest individual shareholders with majority voting power.

Google CEO Sundar Pichai speaks during the Google I/O 2019 keynote session at Shoreline Amphitheatre in Mountain View, California on May 7, 2019. (Photo by Josh Edelson / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)

Forte thinks Alphabet will be fine, especially if they learn from Apple’s playbook. He calls Tim Cook’s transition from chief operating officer to chief executive officer in 2011 as the “gold standard” of transitions.

“I think what you can learn from Tim Cook is, if you take an excellent person in operation and give them the role of CEO and they surround themselves with talented other executives including help necessarily with the vision and things of that nature, that you can still have a very successful stock,” Forte said.

While the departures have Wall Street wondering who will succeed the executives at the helm of the FAANG companies (Facebook, Amazon, Apple, Netflix and Google), most don’t expect the other FAANG executives to step down anytime soon.

“With both Facebook and Amazon, you've got the leaders still very, very actively involved with their businesses, which was not the case here with Google and Alphabet,” O'Donnell said. “I certainly suspect that we'll continue to see Amazon and Facebook moving forward with Bezos and Mark Zuckerberg [respectively].”

Brooke DiPalma is a producer for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma.


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