By: Richard Nieva | CNet
When Ruth Porat, Google’s chief financial officer, addressed analysts on a conference call for the first time in July, she preached one thing: balance.
“A key focus is on the levers within our control to manage the pace of expenses while still ensuring and supporting our growth,” she said at the time.
If only they knew the half of it. Balance was at the center of a bombshell announcementMonday, when the company created Alphabet, a holding company for Google’s many businesses. Google will be a slimmed-down version of itself under the new umbrella, focusing on core products like search, email, YouTube and Android, the company’s software that powers smartphones and tablets. More nascent projects — like Google X, the company’s experimental lab focused on moon shots like driverless cars and drones, as well as Fiber, Google’s high-speed Internet initiative — will be broken out into separate companies, with their own CEOs, managed by Google’s co-founders and the Alphabet conglomerate.
As part of the restructuring, Porat gets a bump in responsibility as well: She’ll continue to be Google’s CFO, but will also be CFO of Alphabet. That’s a huge role.
As Page laid out in his announcement, a big part of Alphabet’s raison d’etre is to handle money matters. The brain trust at the holding company will “rigorously handle” capital allocation for each business. They’ll determine compensation for each business’ CEO. Starting in the fourth quarter, the company will also report financials for Google on its own, as well as the rest of its money-losing enterprises — giving investors a better sense of the health of Google’s core business.
In other words: Pull those levers, Porat.
She’s likely the right person to do it. As a Wall Street veteran, Porat, 58, is the counterbalance to the free-wheeling Page and fellow co-founder Sergey Brin. She joined Morgan Stanley in 1987 and held several major jobs at the company, including vice chairman of investment banking and co-head of technology investment banking. A Silicon Valley native, she is a graduate of Stanford and holds a masters degree in administration from the Wharton School. She also serves on Stanford’s board of trustees.
Google landing the well-respected Porat for the role in March was widely acclaimed. Early reviews are favorable. After her first conference call in July, Google had a historic day on the stock market — adding $65 billion to its market cap.
“Ruth has gotten off to a great start right out of the gate,” Joseph Fath, portfolio manager at T. Rowe Price, told The New York Times shortly afterward. She’s also No. 32 on this year’s Forbes Most Powerful Women list.