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Eric Schmidt Steps Down as Google’s CEO

This afternoon the Internet giant of all Internet giants announced that it’s shaking things up. That is, Google’s Eric Schmidt is ending his 10-year run as CEO, and will be replaced by Google co-founder Larry Page. 

Triumvirate Reorganized

As Google's founding CEO, Page held the chief executive position from 1998 to 2001. Starting April 4th, he will once again take charge of the company's day-to-day operations as well as head Google's product development and technology strategy. Meanwhile, Shmidt will sick around as the company’s executive chairman, and other co-founder Sergey Brin will continue to work on Google's strategic projects, but no longer serve as a company president.

This move is a big one for ol’ Google, as Schmidt, Page and Brin have long run the company as a trio, an approach Page articulated quite clearly in the company's 2004 IPO filing:

We run Google as a triumvirate. The three of us run the company collaboratively with Sergey and me as presidents. The structure is unconventional, but we have worked successfully in this way.

Though it goes against Google’s well-worn techniques, Shmidt claims the reorganization won’t hurt the company’s mojo. In fact, he believes the new management structure will speed up the decision making process.

“For the last 10 years, we have all been equally involved in making decisions,” he wrote on Google official announcement. “This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.” 

Deeper Concerns

The move is creating buzz all around the 'net, but we can't honestly say we're surprised by it. After all, Google saw a fair amount of loss in terms of talent in 2010. 

AdMob co-founder Omar Hamoui, Google Maps and Wave creator Lars Rasmussen, and YouTube co-founder and CEO Chad Hurley all left the Internet giant within months of each other.

What's the deal, you ask? Well, in this case, size matters. When Google designer Douglas Bowman famously quit in 2009, his personal blog provided some insight into the dark side of working for a massive company: 

Yes, it’s true that a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better. I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that. I’ve grown tired of debating such minuscule design decisions. There are more exciting design problems in this world to tackle.

When Rasmussen left to go work for Facebook, he also claimed Google's growing size hindered the ability to get things done (Google employs 25,000 staff members while Facebook has about 2,000).

"The energy there is just amazing, whereas it can be very challenging to be working in a company the size of Google" he said. In fact, of the more than 1,900 Facebook employees with resumes on LinkedIn, 300 of them list Google as a past employer.

A Better Tomorrow? 

On the surface, it seems like Google's move is a much needed one. Less people to consult means things get done faster— it makes sense. 

Further, the company reported a US$ 2.54 billion profit in the fourth quarter of 2010, which is up 28 percent from the comparable period a year earlier, so it's not exactly like they're in the woods. Perhaps management moves will help to increase these numbers even more in 2011. We'll just have to wait and see. 

 
 
 
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