The news that Eric Schmidt is being “kicked upstairs” to Executive Chairman at Google, to be replaced as CEO by co-founder Larry Page, has us all reading the tea leaves for what that means for Google. Google is almost as difficult to work with for analysts as Apple and thus, my reflections below come mostly as a long-time, interested observer of Google than any deep insights I have from working with them. I do, however, spend a lot of time working with people who work with Google.
- The replacement of a CEO by a founder at a successful company is not exactly without precedent. Michael Dell got shunted aside by his Board only to lead a renewal of the company upon his return.
- What do these people have in common? John Sculley, Michael Spindler, Gil Amelio. Those were the people who served as Apple CEO after Steve Jobs was pushed aside.
Thus, there’s precedent for a CEO returning to revitalize a company that has lost its way. Now I’m not saying that Larry Page is Steve Jobs or even Michael Dell. That has yet to be demonstrated. However, make no mistake about it, Google is in need of revitalization.
How can I make that statement about one of the industry’s grand success stories? Well, let’s peek under that success. What exactly has Google succeeded at? I and others have long observed that Google’s a one-trick pony even while acknowledging that the one trick is a pretty darned good one. Other than selling advertising on search results pages, what has Google done that has earned money? I’m a big fan of Android, and happily own a Droid, but that’s not a revenue story yet. Clearly the bet is that mobile advertising is going to be really big and that owning the platform is essential to reaping full economic benefit or at least maintaining control of its own destiny. Perhaps true but as yet unproven. That’s largely it from a revenue producing standpoint in the immediate and medium-term.
Google’s other initiatives have largely been either failures (e.g., Wave) or acquisitions of interesting things (e.g., YouTube, Picasa) that haven’t particularly benefited (nor been harmed) by Google’s acquisition. Saying “nor been harmed” is actually a positive statement as we’ve seen numerous tech acquisitions over the years where the acquired company/technology disappears into irrelevance. Nonetheless, it’s fair to say that Google’s a one trick pony.
Here’s the challenge: that one trick is on the verge of running out, perhaps a victim of Google’s own success. Most of you are probably aware of the acronym SEO. Search engine optimization. Basically it means that it’s important for a web site to show up on the first page of a Google search result either through “gaming” the Google indexing algorithm and/or through buying keywords. Both of those today face challenges. Google used to be magic. When you typed something into its search box, you were presented with the pages you actually wanted to see. Now you see more and more pages that are not really the ones you wanted but instead are ones of someone trying to sell you something who have done a better job of playing the SEO game than the actual content you were trying to reach. And if I wanted the Wikipedia page, which so often shows up first, well, I would have gone to Wikipedia in the first place. Thanks for nothing. I won’t get into the discussion about the challenges to Google’s keywords because either (a) you know this better than me or (b) if you don’t, it’s not really that interesting; just know that there are a lot of dissatisfied campers in the world who are really looking for alternatives, more cost-effective and more effective, than Google.
What does this have to do with Larry Page and Eric Schmidt? Two-and-a-half years ago, Google’s Marissa Mayer said search is “90 to 95%” solved. I was in violent disagreement with that then and since then, I would argue we’ve moved backwards. It is getting harder and harder to find what we want and what we need, and the introduction of more complex time and location elements is only worsening the problem. It’s not like Schmidt had a more compelling vision than Mayer as expressed in this interview at the time with Michael Arrington.
Google is in need of a reinvention. I was going to say “desperate” but it hasn’t reached that point. Yet. However, search is being reinvented in front of our eyes. For certain things, I don’t go to Google but instead go to Twitter or Quora or Facebook or any of a hundred different sites that give me not an algorithmic result but a human or curated one. And there’s wide amounts of room to improve the algorithmic search taking radical new approaches. I’m not holding up Bing as an example of a radical new approach but it is a step forward with an attempt to divine context when searching and to present “solutions” and not just algorithmically-resulting pages. Cheap shot alert: You know when Microsoft is out-innovating you, you’ve got an issue on your hands.
I don’t know whether Larry Page is the man with the vision to reinvent search and reinvent Google. However, I’m pretty sure Eric Schmidt wasn’t that man. Give Page (and Brin) credit for recognizing the “problem” before it really started manifesting itself in true harm to Google’s core business. Google has always been noted for supporting its people in the development of quirky projects which have ranged from the totally inane to the mildly interesting. I’ll be looking for signs now that we’re going to see profoundly new, important and creative approaches to Google’s core business, led and oriented by Page. The one-trick pony needs a new trick. Zenith or reinvention? It’s going to be an interesting year.