Opinion

Felix Salmon

Eric Schmidt’s next act

By Felix Salmon
January 21, 2011

Ken Auletta, who literally wrote the book when it comes to Google, has a must-read take on what exactly is going on with Eric Schmidt, and goes out on a limb by saying that his tenure in the weird job of non-CEO executive chairman will last just one year before Schmidt leaves to “do something else.” (This fits with reports that Schmidt is planning to sell a chunk of Google stock.)

The era of Larry Page, CEO, is about to begin: it’s clearly what Page wants, but it’s also something that he’s temperamentally ill-suited to:

Larry Page, who read books on business as a young man, who at age twelve read a biography of Nikola Tesla and took away the lesson that it was not enough to be a brilliant scientist if you were not also a good businessman who controlled your inventions, had more aptitude for management than Sergey Brin. It was always assumed that one day Page would be C.E.O. Now that he is about to be, he will have to change. He is a very private man, who often in meetings looks down at his hand-held Android device, who is not a comfortable public speaker, who hates to have a regimented schedule, who thinks it is an inefficient use of his time to invest too much of it in meetings with journalists or analysts or governments. As C.E.O., the private man will have to become more public.

Looked at in this light, Schmidt’s year as executive chairman is essentially a way of softening the blow of being CEO: Schmidt will take on a lot of the responsibilities which Page is ill-suited to, at least for a while, giving Page some time to get his management ducks in a row before facing a lot of public music.

Meanwhile, YouGov BrandIndex sends over this chart, showing that the perceptions gap between Facebook and Google has never been narrower:

moz-screenshot-108.png

My suspicion is that it’s Sergei, rather than Larry, who’s going to be mostly responsible for keeping Google’s score as high as possible here, and tending the don’t-be-evil flame. He’s also going to be in charge of various undisclosed moves out of Google’s core advertising business, while Larry tries to bring more focus and drive to what has become a very large bureaucracy.

As for Eric, as Auletta says, he’s “fifty-five, a billionaire, a man comfortable in his own skin.” The option space available to him is enormous. But after spending his entire professional life working for other people, I suspect he’ll want to be the owner or founder of whatever he does next.

Comments
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I don’t buy it. I think their public explanation for the change makes sense – managing by committee is slow, and it is what has been killing Microsoft. If the 3 guys have to discuss every issue that normally one person gets to decide, it will take much longer, even if they agree, just because they need to find the time to discuss it. What the 3 of them realize is that they are mostly (not completely) in sync, and feel comfortable partitioning tasks amongst the themselves. Page will not need to be the public schmoozer that Schmidt is, that’s why Schmidt says he will stay around (I believe him when he says he wants to work with the other two for another ten years).

Selling 5% of your incredibly concentrated position in one stock is hardly a sign that an executive is planning on leaving. If you never sell shares that are worth billions, you can’t live like a billionaire. Larry and Sergei are selling a similar amount of shares, and they aren’t leaving.

Schmidt is not your typical CEO – he is a geek who can operate in that mostly politically driven world. I don’t sense an outsized ego like most celebrity CEOs have, and I don’t think he necessarily would want to start something of “his own”, unless it’s an idea that doesn’t fall within Google’s scope (which seems to be pretty broad). Google is not where Microsoft was when Gates left, there is still a lot they can do that Schmidt could be very happy being part of. Most CEOs who leave to start their own thing aren’t as smart as Schmidt, but desperately want to prove they are. Schmidt doesn’t have to prove that, because his peers in the industry already know it.

If you had a an Android Nexus One, you would look at it during meetings, also. Not only do meetings usually suck, but the N1 is one of those great devices that transcend phones and toys.

Posted by KenG_CA | Report as abusive
 

KenG, would you look at your Android while you were supposed to be having a meeting with Barry Diller?

Posted by johnhhaskell | Report as abusive
 

John, I wouldn’t have a meeting with Diller if I am running google. He is an overrated trader of internet companies, most of which peaked just as he bought them. Many of his companies compete (poorly) with one google service or another, but if I was in a meeting with him, I would look at my android. I’d try to be discreet about it, so as to not insult the guy, but I would bet Diller looks at his Blackberry when he is in meetings.

Posted by KenG_CA | Report as abusive
 

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