There are at least two main – mostly revenue based – reasons:

1. Google’s core business, search, continues to lose steam with a key metric, cost-per-click, falling as mobile app usage skyrocketed.

2. … reasons why Google has renamed itself Alphabet…: It positions the tech company to expand into health care, which could be very healthy for its long-term fortunes… Google’s revenues are extremely dependent on its relationship with Apple — and there are questions over what the Search business model will look like as mobile devices evolve. Meanwhile, health care is a multi-trillion-dollar business. Health care will stay a multi-trillion-dollar business for years to come… In the past year alone, the company has teased a pill that would detect cancer, debuted a plan to map all the biomarkers in the human body, and … half-dozen other wild inventions that could change health care forever… shifting from Google to Alphabet could catalyze a new wave of [health care] product development.
Read more: http://www.forbes.com/sites/dandiamond/2015/08/11/google-is-now-alphabet-and-it-could-spell-big-things-for-healthcare/

See also: Larry Page: ” we are creating a new company, called Alphabet”

“Compass” recently released its annual Global Startup Ecosystem Ranking for 2015.

Four European cities made the cut: Amsterdam is enjoying its first appearance in the top 20 at number 19, Paris achieved an impressive 11th place, Berlin came in at an admirable 9th, and London remains the uncontested European heavy-hitter, at number 6.

–Europe, it’s time we built our own Silicon Valley. By Boris Veldhuijzen van Zanten. VentureBeat, August 15, 2015

“Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity)… Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity)”

Source: Google Announces Plans for New Operating Structure by Larry Page CEO, Alphabet

Top Internet companies say there is no technical way for them to protect their users’ legitimate privacy with encryption while also enabling intelligence agents and law enforcement to gain access to what terrorists plot online… Even when the devices are lawfully seized through court orders, intelligence and law-enforcement agencies are unable to retrieve data from them… Last year, Apple announced that its iPhone operating system would encrypt data by default… “it’s not technically feasible for us to respond to government warrants.” Google now has similar encryption for Android devices, as does Facebook for its WhatsApp app…
Source: Why Terrorists Love Silicon Valley. By L. Gordon Crovitz. Wall Street Journal.
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See also an “Opinion” column in WaPost: Why the fear over ubiquitous data encryption is overblown. By Mike McConnell, Michael Chertoff and William Lynn

First, such an encryption system would protect individual privacy and business information from exploitation at a much higher level than exists today. As a recent MIT paper explains, requiring duplicate keys introduces vulnerabilities in encryption that raise the risk of compromise and theft by bad actors. If third-party key holders have less than perfect security, they may be hacked and the duplicate key exposed. This is no theoretical possibility, as evidenced by major cyberintrusions into supposedly secure government databases…

Second, a requirement that U.S. technology providers create a duplicate key will not prevent malicious actors from finding other technology providers who will furnish ubiquitous encryption. The smart bad guys will find ways and technologies to avoid access, and we can be sure that the “dark Web” marketplace will offer myriad such capabilities. This could lead to a perverse outcome in which law-abiding organizations and individuals lack protected communications but malicious actors have them.
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SilValVNews : In other words “a requirement that U.S. technology providers create a duplicate key” will finally lead to an attempt to create a cyberspace version of so called “Gun Free zone“:

CALIFORNIA’s Silicon Valley, the 50-mile stretch between San Francisco and San Jose, is perhaps the most productive and innovative land mass in the world.

The Economist has identified 99 listed technology companies with market values of over $1 billion that call the Valley home.

Together, these 99 companies are worth some $2.8 trillion (an increase of 75% over the past 30 months), and account for around 6% of all corporate America’s corporate profits.
Source: Silicon Valley’s fortunes: What a PErformance, Economist

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