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
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Valdes wondered if the behind-the-scenes scenario involves Schmidt stepping down voluntarily as a result of fatigue after an intense decade at the helm, and Page taking over on an interim basis until a new, more permanent leader is found.

Analyst and publisher Danny Sullivan at SearchEngineLand.com had a similar thought. "The two cofounders are notoriously difficult to pin down for any event, such as doing major press interviews or conference appearances. Part of Schmidt's role has been to be the 'dependable face' of Google for such things. But being that face can take a toll," he wrote.

But Google was also overdue for a management change, Sullivan wrote, noting that a decade "may as well be 100 years of Internet time."

Steve Arnold, an analyst who heads the firm ArnoldIT, faulted Schmidt for leaving Google too dependent on search advertising. "It has not diversified its revenue streams in a meaningful way," Arnold said. The financial success that Google has enjoyed has been largely due to ad sales, and was probably little influenced by Schmidt, he said.

Arnold also finds fault with Schmidt's public comments, which have sometimes fuelled existing controversies. And he notes that Google has had problems retaining talented employees, who sometimes leave to go to Facebook and more promising startups.

Consumer Watchdog, an organization that has been critical of Google's privacy policies and missteps, said it welcomes the CEO change.

"Eric Schmidt has put his foot in his mouth so far on key issues like privacy that he's kicked himself out of the CEO's office," said John M. Simpson, director of Consumer Watchdog's Inside Google Project, in a statement.

But while Google continues to generate most of its revenue from ads on its search result pages and partner websites, the company has spread its wings during Schmidt's tenure. It started by complementing its search service with other consumer online services, often rocking established markets, as it did with webmail when it launched Gmail in 2004.

It has also become a key mobile player with its Android platform and with mobile versions of its various services and applications. The company has entered the enterprise software market with Google Apps, and its Chrome browser and operating system could leave it poised to become a provider of a new personal computing platform.

But Schmidt was also at the helm for some controversies Google found itself in over the past decade, including a number of privacy-related fiascos and thorny copyright-ingringement lawsuits from book publishers, media conglomerates and major companies.

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