Nine years later does Google still need 'adult supervision?'

Nine years later does Google still need 'adult supervision?'

Summary: Google founders turn 37 years old very soon. Do they still need supervision?

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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?

- - -

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."

Topics: Legal, Banking, Enterprise Software, Google

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4 comments
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  • Wait a minute...

    Didn't we see in the news that the founders are
    going to be reducing their stakes in the company,
    to the point where they will no longer have a
    controlling interest?
    aep528
  • Google has issues

    I especially am cognizant of them with their privacy issues. They are selling information to the US Government. They placated the Chinese government with their censorship demands and provided them with traffic info as well. I have been using Bing more often ! Their results have been improving. I don't always trust Google.
    pizzaman7
  • Would the founders have done better?

    I'm not all that big a fan of Schmidt, but for all the problems you cite Google has grown from $6 billion in revenue in 2005 to $23.6 billion in 2009. By any definition, that's wildly successful.

    Many of the issues you cited are just normal growing pains. When you become a dominant force that quickly people will be gunning for you. And there's no doubt that Google has never been shy about venturing into areas concerning privacy and intellectual property rights, but the potential gains are huge -- not only for Google, but for the rest of us. How many people could survive a day without using some Google service that nobody else can match?

    It's a valid concern that no single company should be making these kind of decisions for the rest of us, but at least Google is forcing us to finally confront these issues. A hundred years from now, that may well have been Google's greatest contribution.
    zackers
  • RE: Nine years later does Google still need 'adult supervision?'

    How can Google know which e-mailboxes belong to human
    rights activists? Do Gmail users need to claim whether
    they are human rights activists when applying for an
    account? Or did Google already know clearly about the e-
    mails of these human rights activists? It makes every
    gmail user wondered.
    stevel12345