Google ready to untie 'adult supervision' apron strings

By Michael Liedtke

SAN FRANCISCO - Eric Schmidt, a technology veteran brought in as Google's "adult supervision" a decade ago, is relinquishing the chief executive job to Larry Page, one of the prodigies who co-founded the company behind the internet's dominant gateway.

The surprise shake-up announced yesterday appears to be driven by Schmidt's desire to assume more of a behind-the-scenes role as much as Page's personal ambition.

"Day-to-day adult supervision no longer needed!" Schmidt wrote on his Twitter account moments after Google dropped the bombshell that upstaged its fourth-quarter earnings.

Schmidt, 55, will still be available to advise Page, 37, and Google's other 37-year-old founder, Sergey Brin, as the company's executive chairman.

Under the new pecking order, effective from April 4, Page will reclaim the chief executive job he held for three years before Google's investors insisted that a more mature leader be brought aboard.

That led to the 2001 hiring of Schmidt, a professorial engineer who had previously held top executive jobs at Sun Microsystems and Novell.

After initially resisting Google's overtures, Schmidt bonded with Page and Brin to form a brain trust that proceeded to build the internet's most powerful company.

Google now boasts a market value of more than US$200 billion ($264 billion), a success story that has made billionaires Page, Brin and Schmidt among the world's wealthiest individuals.

The management reshuffling appears to be amicable. Page and Schmidt had high praise for each other during a conference call with analysts, with Schmidt describing Google's co-founders as his "best friends."

"I believe Larry is ready" to be chief executive, Schmidt said during the call. "It's time for him to have a shot at running this."

Schmidt also may have been growing weary of all the scrutiny that comes with running one of the world's most scrutinised companies.

For the first time last year, he started to sit out Google's quarterly calls to discuss its earnings. More recently, he has expressed irritation about how some of his public remarks have been picked apart to support the idea that Google is an arrogant company that can't be trusted to protect people's privacy as its search engine and other services collect vast amounts of personal information.

In his new role, Schmidt indicated he will focus on meeting Google's business partners and government regulators who have been taking a harder look at whether Google has been abusing its dominance in internet search to thwart competition.

Brin intends to concentrate on a few undisclosed high-priority products. One of his pet projects is believed to be the development of social media tools to counter a looming threat posed by Facebook's increasing popularity.

Facebook is selling more internet ads and collecting an immense amount of information about its nearly 600 million users within the confines of a social network that Google hasn't been able to crack.

Facebook still has a long way to go to catch Google, as demonstrated by the way Google cranked up its internet marketing machine during the holiday shopping season.

Google earned US$2.5 billion, or US$7.81 a share, during the final three months of last year. That's a 29 per cent increase from net income of US$2 billion, or US$6.13 a share, in the year before.

Excluding stock-compensation expenses, Google says it earned US$8.75 a share. Revenue climbed 26 per cent from the year earlier to US$8.44 billion, from US$6.67 billion.

After subtracting commissions paid to Google's advertising partners, the company's revenue totalled US$6.37 billion - about US$300 million more than expected.

- AP

- NZ Herald

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