Eric Schmidt, will step down after ten years and allow Larry Page to take over the job as CEO of the US search giant, in April. Mr. Schmidt will settle into a job as executive chairman and will focus on, according to a Google spokesman, “deals, partnerships, customers and broader business relationships”.
Many people have forgotten that Mr. Page, 37, used to be the Google chief but he was asked to step down by investors due to his lack of experience. This is when Mr. Schmidt, 55, stepped in as a more experienced and older chief. Nobody could criticise Mr. Schmidt for doing a bad job, the 4th quarter of 2010 showed another impressive rise in profit, revenue and share price; rises above what analysts expected.
Google have strengthened their Internet advertising machine before the Christmas shopping rush, leading to a 26% increase in revenues to 8.44bn from the same time the year before. Profits have also risen to $2.54bn from $1.97bn over 12 months; leaving share prices about 2% higher at $639. The company is now valued at $200bn.
What can we expect from Larry Page?
Mr. Schmidt has issued a statement expressing his feelings about the change, “In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey (Brin) for a long time to come,” Sergey Brin is the third founder of Google along with Larry Page and Eric Schmidt.
The April 4th changes are all part of a streamlining process to create clearer lines of responsibility and accountability. Mr. Schmidt went onto say “We’ve been talking about how best to simplify our management structure and speed up decision making for a long time…Larry will now lead product development and technology strategy, his greatest strengths…Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be co-founder.”
It’s more than likely that Larry Page will bring the dynamism of youth and a more techie edge to the company. This could be seen a direct move by Google to compete with Mark Zuckerberg’s Facebook. Mr. Schmidt represents sensible business money making, whereas Larry Page is young tech geekery.
Concerns from Wall Street
Wall Street may well see this move as negative; the CEO change could represent issues going on at the top of the Google command structure, such as lack of efficiency. Mike Hickey over at Janco Partners, states: “When you see an executive change, you hesitate because generally, it’s a disruption at the top. Obviously the numbers look good, so it’s a balance between the two.’
At the end of the day it’s unlikely that Google will change its overall strategic position. Schmidt will just be able to float around more freely adding value where he sees fit.
I believe that Google will be focusing on mobile and Larry Page is the man to do this.