Larry Page, back as Google CEO, shakes up top ranks
The Larry Page era has officially begun — with a management shake-up.
Just days after returning as Google Inc.’s chief executive, Page swiftly set the tone for how he would run the Internet search giant with a major reorganization of his management team.
Page is trying to restore the sense of urgency and innovation that drove Google’s prior successes, analysts said. The reorganization also puts him firmly in charge of the world’s largest Internet company in much the same way Steve Jobs runs Apple Inc.
“Larry’s coming out of the gate blazing,” said BGC Partners analyst Colin Gillis.
The 38-year-old co-founder promoted seven executives to run Google’s most important divisions. They will report directly to him in an effort to cut out bureaucracy and speed up decision making.
Page reorganized his management team the same week that Jonathan Rosenberg, a senior vice president who oversaw four of the executives, said he would leave Google.
Some analysts said Page was taking a much-needed step to reinvigorate Google as it faces mounting competition from nimble rivals for users and advertising dollars.
Page is also shaking up Google’s rank and file. He plans to tie 25% of employee annual bonuses to the success of Google’s social networking initiatives.
“He’s clearly not just going to be Eric Schmidt 2.0,” Gillis said.
Page was Google’s first chief executive before handing the reins to Schmidt in 2001 when the company was a barely profitable start-up with 200 employees. The pair, along with co-founder Sergey Brin, ran the company in an unusual power-sharing agreement, and for years Page called the shots on Google’s most important product initiatives.
On Monday, Page began calling all the shots for the company, which now generates nearly $30 billion in annual revenue and has more than 24,000 employees.
“Larry’s decisions will be under the microscope over the next year or two, but it will be a while before we can really judge him on his ability to run the company,” said John Lutz, senior research analyst with Frost Investment Advisors, which owns Google shares.
The promotions signal which areas will be a priority for Page. The executives Page elevated to senior vice president include Andy Rubin, who is in charge of Android mobile phone software; Salar Kamangar, who runs YouTube and video; Sundar Pichai, head of the Chrome Web browser and operating system; and Vic Gundotra, who is focused on Google’s social networking strategy to compete with a wave of young Web companies, most notably Facebook Inc.
Three senior vice presidents also were singled out in the shake-up. Susan Wojcicki, who leads advertising, will take charge of ads. Alan Eustace, who leads engineering and research, will take over Web search. Jeff Huber, an engineering executive, will run local and commerce.
It’s unclear whether there will be any change in status for other senior vice presidents at Google who do not oversee product groups, including sales chief Nikesh Arora, Chief Legal Officer David Drummond and Chief Financial Officer Patrick Pichette.
Marissa Mayer, another prominent Google executive, was not tapped for a promotion but will remain in her role overseeing local and location services, reporting to Huber. One of her key projects is developing Google’s version of the daily deal site Groupon, sources said. Google offered more than $5 billion for Groupon but was rebuffed late last year.
A Google spokesman confirmed that a reorganization had taken place but declined to comment on the details.
Page has been preparing for months to reorganize Google to eliminate red tape and political wrangling, analysts said. He may have found his answer in the success of the company’s Android mobile software unit and its video-sharing site YouTube, each of which have thrived as largely autonomous entities.
But growth at the company has slowed in recent years, with most of Google’s revenue still coming from its search advertising business, causing the stock to underperform the market. The company has produced a string of flops, including Google Buzz, its flawed attempt at a social networking service. It faces increasing scrutiny from regulators around the globe. And Facebook and other competitors have been trying to pick off its star talent, including Pichai, whom Google paid millions to turn down a major offer from Twitter Inc.
Google reports first-quarter earnings Thursday.
Steven Levy, author of the new book “In the Plex: How Google Thinks, Works and Shapes Our Lives,” describes Page as an entrepreneur with sweeping ambitions to goose Google into acting more like the fleet-footed start-up it was in the past.
“The more people say it’s impossible, that you can’t have a big company act like a small company, the more determined he is to figure out how to do just that,” Levy said.
“He wants to do what no company has ever done, which is to have become a great mover in innovation, to have knocked down companies that came before it, and then come back and do it again.”
Page and Google co-founder Brin, who is focused on major strategic initiatives, have offices next to each other in a recently renovated building on the campus. They are down the hall from Schmidt and surrounded by engineers working on key products. Schmidt, 55, has taken the role of executive chairman and is handling government affairs and partnerships.
That kind of morale boost is an encouraging sign for investors, said Benchmark Co. analyst Clayton Moran.
“Larry Page is making some fairly significant changes to try to change the culture at Google,” he said.
