In what has come as a shock announcement, and overshadowed Google’s latest earnings call, is the news that Eric Schmidt will step down as CEO from April 4 with co-founder Larry Page stepping up to the plate.
The news came as Google announced fourth quarter earnings of $8.44 billion an increase of 26 percent compared to the same period in 2009 – with net income rising from $1.97 billion in 2009 to $2.54billion. Interestingly revenues from the UK totaled $878 million, representing 10 percent of revenues in the fourth quarter of 2010, compared to 12 percent in the fourth quarter of 2009.
However, despite the positive nature of the figures, most of the attention focused on the announcement about the reshuffling of the Google deck which was done to “speed up decision making” and simplify the management structure. While Schmidt may be stepping aside as CEO, he’s not going far taking up a position as Executive Chairman where he'll be “focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership.”
Wondering where the other co-founder Sergey Brin fits into all this? Well, he will now be in what could be described as the “cool department” otherwise known as focusing on “strategic projects, in particular working on new products.” In a blog post, Schmidt said never in his wildest dreams did he expect Google to be this successful when he joined 10 years ago. He said that himself, Page and Brin had acted as a triumvirate over the past decade with “all been equally involved in making decisions.” He said this policy would continue but change was needed. “We have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.”
At the earnings call, Schmidt was asked specifically about the government outreach part of his new role and he replied: “We need to talk to them. They often don’t understand what we’re doing. This is aided by our rivals. So far we’ve been quite successful by just taking the time and getting people to understand what we’re doing. The things we’re doing are pro-competitive. I believe that. And I’ll be arguing that.” Barack Obama may be getting a phone call in the morning it seems.
Praising Schmidt for his decade in charge of Google, Page said: “"Eric has clearly done an outstanding job leading Google for the last decade. The results speak for themselves. There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly.”
As a final parting shot, Schmidt, who for years had been seen as “adult supervision” for Page and Brin, tweeted: “Day-to-day adult supervision is no longer needed.” Aw, those Google guys really have grown up.
Source: Official Google Blog and Google Investor Relations