Meet the New Boss

By Lyons, Daniel | Newsweek, January 31, 2011 | Go to article overview
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Meet the New Boss


Lyons, Daniel, Newsweek


Byline: Daniel Lyons; Isaac Stone Fish

Google cofounder Larry Page is ready to show the world he's all grown up.

For the past decade, Google's management structure has been something of a three-ring circus. Cofounders Larry Page and Sergey Brin served as the main attractions--the wunderkind Stanford graduates who created the search engine that changed the world. But the master of ceremonies was CEO Eric Schmidt, a seemingly low-key Silicon Valley veteran brought in by the board of directors in 2001 to provide adult supervision and coax the Wall Streeters and venture capitalists into the tent. (One of Schmidt's earliest acts of mature decision making was to persuade the boys not to get into the "space tethering" business, an idea for low-cost space launches that makes geeks salivate.)

Life is cyclical, and as the boys grew up and became husbands and fathers, Schmidt seemed to be finding his second youth, attracting unwanted attention in the gossip pages with coed trips to Burning Man and other adventures, and off-the-cuff statements that forced Google's PR team into triage mode. All the while, Google seemed to be losing its mojo to newer rivals like Facebook. And so it is that Page, 37, is replacing Schmidt as CEO, while the 55-year-old moves over to an advisory role with the title of executive chairman. Brin, 37, will focus on developing new products. In many ways, the new management structure is an affirmation of what's already a reality at Google. Although the three men have ostensibly been making decisions together, Schmidt was rarely the senior member of the triumvirate and often appeared to do the behind-the-scenes bidding of the other two. This unusual and at times cumbersome arrangement always seemed out of place in the streamlined, hyperspeed world of tech, where dictators like Apple's Steve Jobs and Facebook's Mark Zuckerberg are more the norm.

In one sense, Page is taking over at an ideal time. Google's business is still robust. Last week the company reported 2010 revenues of $29.3 billion, up 24 percent from 2009. And Google is ridiculously profitable, generating $8.5 billion in net income for the year. But lately there has been a gnawing sense that Google's best days may be behind it--that it may be a one-trick pony, albeit a fabulously successful one. For years the company has tried, and mostly failed, to make money beyond its core business of putting advertising next to search results. Android, Google's mobile-phone operating system, has been a hit, but it is free software and therefore doesn't contribute to revenues, except indirectly, by helping to generate more online-search advertising.

Google's repeated attempts to create some kind of social network that could compete with Facebook have fallen flat. An attempt to reinvent email, called Google Wave, was a total flop and finally got shut down. And while Google struggles to find its Next Big Thing, Microsoft has launched a credible attack on its core business, with a search engine called Bing that, for certain things like travel and shopping, can provide better results than Google does.

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