Google's CEO Switch Could Be Risky Move

With pressure from Facebook looming, Google decided to name Larry Page CEO. Is this a smart move or a case of trying to fix something that isn't broken?

By Juan Carlos Perez
Thu, January 20, 2011

IDG News Service — Google (GOOG) announced Thursday that Eric Schmidt, who was recruited as CEO in 2001, will hand over that role to co-founder Larry Page in early April.

Schmidt to Step Aside As Google CEO, Page Taking Over

In addition to running day-to-day operations, Page will continue to lead Google's product development. Schmidt, as executive chairman, will focus on external initiatives such as visiting customers, meeting with government regulators and negotiating with partners. Google's other co-founder, Sergey Brin, will focus on "strategic projects," and especially new products.

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The goal is to streamline decision-making, the trio said during a conference call. They stressed that Page is ready to be CEO and that they are happy with their roles in the reorganization, which they said will improve Google's already solid financial performance, technical innovation and business growth.

They had better be right, or the move could go down as a management blunder of historic proportions.

When Schmidt took over as CEO almost a decade ago, Google was a promising but small, privately held company focused exclusively on Web search and without much of a business model to speak of. It was led by Page and Brin, two brilliant Stanford computer-science graduate students with little executive management experience.

Over the years Schmidt has helped turn Google, which was founded in 1998, into one of the largest, most successful and influential publicly traded companies in the world. His role has often been described as providing "adult supervision" at a company whose young co-founders like to do things in unconventional ways.

"Schmidt has a great track record and has really steered Google to great success," said Gartner (IT) analyst Ray Valdes.

Schmidt, who previously had been Novell (NOVL) CEO and Sun CTO, has been the public face of Google with his calm, relaxed demeanor, while running the company as a "triumvirate" with Page and Brin.

"Having Eric as the front of Google has been tremendous for Google, and there is no doubt that bringing his perspective has been critical for good decision-making at the company," IDC analyst Al Hilwa said via e-mail.

Some wondered if Page is up to the mammoth task of running such a large, powerful and increasingly diverse company.

"I guess the question is whether being Google CEO is the place to start your executive training. I can say with some assurance that if [Page] went to apply for the CEO job somewhere he wouldn't get it," said Allen Weiner, another Gartner analyst.

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