Nine years later does Google still need 'adult supervision?'
In preparing Google for its IPO, its VC investors convinced Google founders Larry Page and Sergey Brin to bring in an older executive to assure potential investors that there was some 'adult supervision.'
This worked and the GOOG IPO in 2004 was a huge success. Now nine years later since Mr Schmidt joined as CEO and chairman, the adult supervision is still in place, the three share power in a 'triumvirate.'
But what type of 'adult supervision' does Mr Schmidt provide?
He doesn't seem to be carrying out a traditional leadership role as CEO at Google. In an article written three years ago, "Who's Really Running Google?" veteran Forbes reporter Elizabeth Corcoran writes:
...he has defined his job not so much as leading Google but as running interference for it--placating the investment community, soothing nervous regulators and policymakers and doing whatever it takes to create a magical force field protecting Googleteers...
"Running interference" hasn't been working out that well. Take a look:
- Google is facing increasing scrutiny from the US government over possible illegal anti-trust business practices. That's despite Mr Schmidt's very public support for President Obama.
- Google has run into big problems internationally with its books scanning project and Mr Schmidt's attempts to calm the waters have failed repeatedly, resulting in lawsuits.
- Its relationship with Microsoft is very bad, because Google actively opposed its acquisition of Yahoo and other deals. Mr Schmidt is behind that opposition, he spent many years fighting with Microsoft when he was head of Novell. That strategy didn't work then and it isn't working now.
- Mr Schmidt has managed to upset newspaper companies in the US and internationally and he has failed to get them to see Google as an ally rather than as an adversary -- that's despite many meetings with top newspaper tycoons such as Rupert Murdoch.
- Google's relationship with Apple has soured badly, Mr Schmidt was forced to resign from Apple's board.
- Mr Schmidt admitted that he persuaded the Google board to pay $1 billion more than YouTube was worth. Critics said that was to reward VCs who were investors in both Google and YouTube. Google is still trying to figure out how make YouTube profitable.
- His position on Google remaining in China hasn't worked and now Google has few choices, a pull out of China would lose its top Chinese research scientists and a very large investment. It lost the head of its China operations last year.
The founders turn 37 years old this year and are seasoned executives. It must be embarassing to still have 'adult supervison,' especially when it hasn't been working out all that well. Maybe Google's about turn over China shows that the real power is in the duo and not the troika?
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Please see:
Eric Schmidt's Burning Question
When Eric Schmidt applied for the CEO gig, Larry Page and Sergey Brin weren't exactly thrilled to see him. In fact, they didn't really want a CEO at all, but the VCs who were funding them insisted on hiring "adult supervision."