Eric Schmidt out of CEO role at Google

Eric Schmidt bumped to executive chairman role to create clearer management structure

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Eric Schmidt out of CEO role at Google Schmidt will remain as an advisor to the co-founders of Google. (Getty Images)
By  Mark Sutton Published  January 21, 2011

Google has announced that Eric Schmidt, its current CEO is to move to the role of executive chairman, as part of efforts to ‘streamline decision making and create clearer lines of responsibility and accountability at the top of the company'.

Company founder Larry Page will take on the CEO mantle from 4th April, while co-founder Seregy Brin will focus on strategic projects.

Schmidt, who is widely credited as having given Google the business expertise it needed to go from start-up to multi-billion dollar company, will focus on external deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership. He will also act as advisor to Brin and Page.

The company had previously operated on ‘triumvirate' basis, with all three equally involved in decision making. Page joined the company in 2001, and was responsible for guiding the young co-founders through the early stages of the company, and providing business leadership, and even reportedly mediating in disputes between the founders over issues such as bedrooms on the company jet.

In a company statement, Schmidt said: "We've been talking about how best to simplify our management structure and speed up decision making for a long time. By clarifying our individual roles we'll create clearer responsibility and accountability at the top of the company. In my clear opinion, Larry is ready to lead and I'm excited about working with both him and Sergey for a long time to come."

Tellingly, on a Twitter posting at the time of the announcement, Schmidt commented; "Day-to-day adult supervision no longer needed!"

Page added: "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. Eric is a tremendous leader and I have learned innumerable lessons from him. His advice and efforts will be invaluable to me as I start in this new role. Google still has such incredible opportunity--we are only at the beginning and I can't wait to get started."

Google also announced results for Q4, with revenues up 26% from the same quarter 2009, to $8.44 billion.

Google-owned sites generated revenues of $5.67 billion, or 67% of total revenues, up 28% from Q4 2009, and Google Network Revenues generated $2.5 billion revenues, or 30% of total revenues, in the fourth quarter of 2010.

Revenues from outside of the United States totaled $4.38 billion, representing 52% of total revenues in the fourth quarter of 2010, the same as the preceding quarter, although Google said that this result was depressed by forex issues.

In a posting to the Google company blog, Schmidt said: "As our results today show, the outlook is bright. But as Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making.

"For the last 10 years, we have all been equally involved in making decisions. This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there's clear responsibility and accountability at the top of the company.

"We are confident that this focus will serve Google and our users well in the future. Larry, Sergey and I have worked exceptionally closely together for over a decade-and we anticipate working together for a long time to come."

 

Mike Davis, Ovum senior analyst commented: "The announcement that Eric Schmidt Google's CEO was to become executive chairman and to be replaced by one of the founders Larry Page, should not come as a surprise and we believe this is a sassy strategic move.

"Google knows it cannot live on search derived advertising revenues forever, hence its continual release of ‘Beta' products and push towards both the smartphone and enterprise markets, he added. "Such innovation needs a dynamic lead, and the shareholders need a steady voice, the new arrangement should satisfy those requirements."

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