Google (GOOG) shareholders, are you comfortable with your new CEO Larry Page
Larry’s past at the top of Google
I think it’s important to point out that things did run fairly well when Larry and Sergey were running things. Sure, Google was not the money making machine that it is today but a big part of that was the singular focus on the user and a long term perspective, an attitude that I have praised Facebook CEO Mark Zuckerberg for having. When Eric Schmidt arrived, he was bringing experience and that did end up happening just in time for Google to start making money for its shareholders.
Is now the time for Google to let Page back at the top?
In terms of search, Google has it fairly figured out and while some challengers like Microsoft’s Bing do create competition, it’s fair to say that the business mature and I don’t expect much change to happen in that area. However, for other businesses such as Android and Social, things are not as clear and I think the more innovative, risky and long term visions of Page might help Google better compete with very tough competition from Facebook, Apple, Twitter and others. Not that it couldn’t have happened under Schmidt but the more corporate attitude at Google made changes and innovation a bit slower in my opinion which did not help in social media for example.
Downsides?
I don’t think there are any doubts that there could be a price to pay for investors in the short term from this change in leadership:
-Decisions like leaving China: One of the key moments said to have led to this change of leader is the arguments between former CEO Schmidt and the founders about leaving China. Ultimately, the founders won and Google did leave. Do you think it’s by chance that Google was the only top tech company to take such drastic action even calling out the Chinese government in what even required an intervention by the secretary of State Hillary Clinton? It is an incredibly risky move but one that has Page & Brin written all over it. Will it turn out to be a good move? Time will tell but such moves create uncertainty and in the short term, shareholders do not like it.
-Less corporate talk: Eric Schmidt valued being clear about Google’s vision, explaining things to Government officials, the media and to shareholders. To say that will change is a major understatement. Page never was a fan of public speaking and he is more about getting things done. You could say that it is better and I wouldn’t disagree but the world isn’t so simple and it is bound to create some controversy and conflicts.
-Organized chaos: in most companies, launching a product will go through strategy commitees, marketing planning and a bunch of reviews. Wonder why Microsoft launches products so infrequently? Because they are the typical example of a big corporate structure and Google was becoming just that. It was a nightmare for Page as they compete with more nimble companies like Facebook which can launch features or products almost overnight. Expect changes at Google which will be good but could also lead to some mistakes.
Overall opinion
I have no doubt that in the long term, the return of Page at the top will be a great thing but it could be a bumpy ride for GOOG investors.
Disclosure: No positions on Google (GOOG)
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