Larry Page's Biggest Challenges as Google CEO

Larry Page is very different from Eric Schmidt, consequently he will be a completely different Google CEO.

• Mr. Page is the internal hardliner and the main driving force behind Google, providing the uber-ambition, the "open" philosophy/ideology zeal, the passion-for-innovation, and the impatient, aggressive take-no-prisoners approach to most everything Google does.
• Mr. Page has always been the penultimate power, final decision-maker and driving force inside Google behind the scenes.
• Mr. Schmidt has been the co-founders' public face and very able implementer and businessman.

The biggest difference people will notice will be external relations.

First, Schmidt and Page are polar opposites when it comes to external relations.

• Mr. Schmidt is a genial articulate extrovert. He arguably has been the most omnipresent CEO in the Fortune 500; he is constantly in the news, on TV, or keynoting at high-profile events; and he relishes the high-profile role of publicly selling and marketing Google to the world around the world. Mr. Schmidt is the consummate outside player.
• Mr. Page is a brusque, very private introvert and is a relatively weak public speaker. He has disdain for, and aversion, to the traditional core functions of a top public CEO: PR, investor relations, customer relations, sales and marketing and lobbying. Mr. Page is the consummate inside player.
• The most notable big change will be when most all of Google's key outside constituencies will go from a solicitous, responsive and accessible CEO in Schmidt, to an aloof, impatient, and much less responsive and accessible CEO in Page.
  • Everyone that has become trained to have easy accessibility to CEO Schmidt are likely to be frustrated at the general inaccessibility to CEO Page as his personality, interests and strengths naturally will focus him more internally and less externally.

Second, Larry Page will be unfiltered and un-moderated by Eric Schmidt in the public-facing part of the business for the first time in many years.

• This will be a big change because Mr. Schmidt's more experienced and finely-tuned external antennae enabled him to know when to tone down or whitewash much of the full unvarnished internal Google viewpoint of co-founders Page and Brin that was not fit for outside consumption.
• If people were concerned about the things that Mr. Schmidt said about Google ambitions and privacy, over time they will find his views much more moderate and less unsettling than the uber-ambitious, hardline Mr. Page.
• The co-founders have created an internal mono-culture that thinks mostly like Mr. Page and Mr. Brin. This means as a consummate insider, Mr. Page is much less self-aware of when his views are way out of the public mainstream or will scare people.
• Over time, the public will learn that Mr. Page is much more of a hardliner than Mr. Schmidt. Mr. Page is the one in the triumvirate who is most hostile to the notion of having to slow down to protect user privacy, to respect copyrights, and to respect antitrust boundaries.
  • In addition, he is also the ideological policy hardliner, along with Mr. Brin, concerning open source, net neutrality, open/transparent government (Wikileaks), etc. -- behind Google's well known ambition to "change the world."

Larry Page's Biggest Challenges as CEO:

1

. Vision: Soon-to-be CEO Larry Page told the New York Times "One of the primary goals that I have is to get Google to be a big company that has the nimbleness, and soul and the passion of a start-up." That goal appears oxymoronic for Google. A big nimble start-up-like company? Start-ups are nimble precisely because they are small and have none of the constraints, assets or liabilities of real businesses. Start-ups are naturally product-focused like Mr. Page is indicating he wants Google to be.

• This is a big change from Mr. Schmidt's vision, which was to build a profitable global growth business with the corporate infrastructure to support it -- a vision he succeeded in delivering on better and faster than most any CEO in history.

Not only is Mr. Page's start-up vision misdirected it isn't achievable.

• At core Google is all about centralization to achieve un-matchable scale. Centralizing decision making at the top fits this big business centralized model.
• To become more nimble and start-up-like would require breaking the business up into smaller business subsidiaries and then holding them accountable for results.
• The essence of Page's business vision conundrum is that he yearns for the benefits of decentralization in a business he built almost entirely around centralization. A leopard cannot change its spots.

2.  Focus. Everyone knows "Google is a verb." However, if Google were an adjective it would be "unfocused." Interestingly for this leadership transition, the source of most of Google's 360 degree ambition, vision, and competitive strategy to enter every business in every direction is -- Larry Page.

In their IPO letter the founders promised Google was not a conventional company and had no intention of becoming one.

• Don't expect Mr. Page to be a conventional CEO and focus Google.
• His reported disinterest in the internal budgeting process fits with his omni-ambition for Google to be everything for everybody.

3. Discipline. Mr. Page is known to not like personal schedules or meetings and is highly resistant to being pinned down with his time by others. As co-founder and ultimate boss at Google focused almost exclusively inwardly on the company, Mr. Page could get away with that imperious management style.

• However, as CEO of a Fortune 100 company with all the legal, financial, regulatory, international, and public obligations that come with that official legal role, Mr. Page will have to learn the personal discipline of respecting the time and attention of the myriad of people outside of Google that are important to Google's success around the world: partners, advertisers, publishers, developers, the press, investors, regulators, law enforcement, etc.
• This new role will be a big personal challenge to Mr. Page, because it will require a radical change in the way Mr. Page operates on a day-to-day basis.

4. Compromise.

Google arguably faces more major serious external franchise threats than any major corporation in America -- by far.

• Antitrust: Google is under antitrust investigation in the EU and in the U.S.: the DOJ opposes the Google Book Settlement; it is likely to oppose Google's acquisition of ITA Software, and the DOJ and FTC are reportedly fighting amongst themselves over which one of them will take the lead in launching a full anti-monopolization case against Google in the U.S.
  • In addition, companies are beginning to come out of the woodwork to share antitrust complaints against Google now that antitrust authorities appear receptive on both sides of the pond.
  • The franchise risk here is if Google is found guilty of monopolization abuses it will have to change its business model and won't be able to favor Google-owned content, products and services over competitors' -- that would be a huge strategic loss for Google.
• Privacy: Google is being investigated in ~30 countries for violating privacy via its StreetView WiSpy collection of passwords and private information. The EU is focused on forcing Google to obey EU data protection laws, which could prompt a big change in their technological and operational model. And in the U.S. there is bipartisan interest in passing new Do-Not-Track and comprehensive privacy legislation this session.
  • This is a big franchise risk because Google's business is based on Google collecting, storing and using people's private information to influence them without their express permission or awareness.
  • In other words, Google's success depends on keeping users largely in the dark about what Google is doing with their private information and privacy.
• Intellectual Property: Google also faces more IP-infringement risk than any other company.
  • Viacom is very likely to prevail in the Supreme Court in its suit against Google-YouTube given the 9-0 Supreme Court ruling against Grokster.
  • Another court is also likely to reject the Google Book Settlement in the coming months given the DOJ's strong objections.
  • And Google's Android operating system is subject to many serious patent infringement suits that threaten the viability of Google's free mobile model business advantage.

Interestingly, Mr. Page has the huge challenge of resolving the myriad of external problems that his own personal uber-ambitious hardline approach to Google's business has created.

• This will be particularly challenging because Mr. Page fervently believes that Google is right in all of the above disputes and is probably personally disinclined to compromise much for them to go away.

In sum, the Google announcement narrative that not much will change with the change from triumvirate leadership to Larry Page's sole leadership does not make sense.

• Larry Page will be a very different CEO and external leader than Eric Schmidt -- change is a coming at Mountain View.
• And as a hardliner Mr. Page will likely tackle the external challenges facing Google very differently than the more-moderate and conciliatory Mr. Schmidt, this very different leadership approach will have big implications for Google, the Internet and everyone else swirling in the Google vortex.