January 21, 2011, 12:08 PM — From the moment Google stunned the tech world after Thursday's market close by announcing long-time chief executive Eric Schmidt was turning over CEO responsibilities to 37-year-old company co-founder Larry Page as of April 4, industry observers have engage in speculation as to the reasons behind the change.
Like almost everyone else, I'm just guessing from the outside, piecing together facts and impressions that have accumulated over the years. My gut feeling is that Schmidt had tired of the day-to-day grind and also actually did believe Page was ready to take over.
(Also see: Forget about Google succession story)
In addition, Schmidt has taken some heat over the past year for controversial comments he's made about privacy issues and, being 55 years old and a billionaire and all, he likely thought, "Screw it, I don't need this."
I also have read that there was tension between Schmidt and Google's two co-founders, Page and Sergey Brin, over some specific issues as well as the overall culture of the company. Along those lines, the best analysis I've come across is by Ken Auletta in The New Yorker.
Auletta in 2009 authored a book titled "Googled: The End of the World As We Know It." In the course of his research he spent a lot of time talking to Schmidt.
His New Yorker piece is well worth a full read, but here's some of what Auletta says:
Was Eric Schmidt pushed or did he jump? Both. According to close advisors, the Google C.E.O. was upset a year ago when co-founder Larry Page sided with his founding partner, Sergey Brin, to withdraw censored searches from China. Schmidt did not hide his belief that Google should stay in the world’s largest consumer marketplace.
Here might be a good place for me to mention the dumbest theory about why Schmidt stepped aside as CEO, this from a commenter to a CNN article: "Political pressure from the Chinese. Google did not want to support the regime's censorship." Dude, the guy who, according to you, just lost his job due to political pressure from China actually was in the "let's do business with the censoring regime" camp. You got it backwards.
Back to Auletta:
Schmidt, according to associates, lost some energy and focus after losing the China decision. At the same time, Google was becoming defensive. All of their social-network efforts had faltered. Facebook had replaced them as the hot tech company, the place vital engineers wanted to work. Complaints about Google bureaucracy intensified. Governments around the world were lobbing grenades at Google over privacy, copyright, and size issues.