Google management shuffle: Right move, wrong guy?

Ousting Eric Schmidt from CEO may make sense, but is co-founder Larry Page really the right person to take over the reins?

Today's announcement that Google co-founder Larry Page would replace Eric Schmidt as the company's CEO was a surprise, but maybe it shouldn't have been. While the company's earnings are still stellar, Schmidt has made a series of embarrassing statements and the company has had some very public failures.

But is it really the best idea to turn over the day-to-day operations of one of the world's biggest and most important companies to the guy who conceived of it in his dorm room at Stanford University? There's no doubt that Larry Page is a genius with technology, but does he have the discipline and know-how to keep a 24,000-employee company, one with its fingers in dozens of different businesses, not only running but advancing? It's that question that makes this management shuffle a very high-stakes gamble.

In the world of startups, it's generally acknowledged that the founders of companies - especially those founders who are most involved in the technical side of a product - aren't usually the best people to lead those companies over the long run. Once a company hits a critical mass, investors often insist on bringing in what they call "adult supervision" - an experienced businessperson to take day-to-day control as CEO.

And that pattern played out in the early days of Google. Page and co-founder Sergey Brin acted as co-presidents in the search engine's early days, from 1998 until 2001. Then they hired Schmidt as CEO. Schmidt had been CEO of Novell and had a string of management positions in other technology firms, including Sun Microsystems and Xerox.

Schmidt announced today's switch in this Twitter feed by saying: "Day-to-day adult supervision no longer needed!" I may be wrong, but it seems to me there's a tone in those 46 characters. To me, it sounds like Schmidt may not be entirely convinced that "the kids" are ready to take over. (Schmidt won't be leaving Google; he'll continue as executive chairman and focus on lobbying and deals with external partners.)

The Case for Change

But I think you can make a strong case for the need for new leadership at Google. Perhaps the biggest problem was Schmidt's recent penchant for making statements that just reinforced the creepy feeling many people have about how much Google knows about us.

In October, for instance, Schmidt had this reply for people who don't want their homes photographed by Google Street View: "With Street View, we drive by exactly once, so you can just move." In August, Schmidt suggested that most children might need to change their names once they reach adulthood so they could disavow all the embarrassing information they had posted on the Internet in their youth.

Some people were creeped out by Schmidt's vision of the future of search, in which Google uses what it knows about you to suggest information that you'll want, rather than waiting for you to enter a query.

And while Google's business is clearly thriving overall and Android has been spectacularly successful, there have been some ugly failures of late. Perhaps the worst is Google's inability to make headway in social networking. Unless you live in Brazil, Orkut is probably a nonentity to you. And since its much-heralded debut, Google Buzz has just laid there like a squished bee. Add to that the shuttering of the supposedly revolutionary Google Wave and the fact that Bing has become a solid competitor in search and there's certainly reason for concern.

The question for anyone who's interested in Google's success is whether Larry Page is really the right person to take over. Should Google instead have brought in another "adult," someone with solid experience running a huge organization? And has Page, whose education, after all, was in computer science, not business, learned enough at Schmidt's elbow to take over day-to-day responsibility? Gartner analyst Allen Weiner told the IDG News Service: "I can say with some assurance that if [Page] went to apply for the CEO job somewhere [else], he wouldn't get it."

But while the conventional wisdom is that the founders of tech companies don't make great leaders, you can also point to two great exceptions: Bill Gates and Steve Jobs. Google employees and shareholders better hope that soon we'll be adding Page to that list of exceptions.

This story, "Google management shuffle: Right move, wrong guy?" was originally published by PCWorld.

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