Tuesday, December 15, 2009, 2:49AM ET - U.S. Markets open in 6 hours and 41 minutes.
- Home
- Tech Industries
- Topics
- Reporters
- Subscribe
As Google's Bloom Fades, Will CEO Eric Schmidt Step Down?
Posted Nov 25, 2008 01:53pm EST by Henry Blodget in Investing, InternetUPDATE: Google shares rallying Tuesday after recent declines. New data shows Google’s dominance in search grew further in October. Reports AP: “Google held a 63.1 percent share of the U.S. search market through October, up from 58.5 percent in the previous year, according to comScore. Yahoo ranked a distant second at 20.5 percent, down from 22.9 percent a year ago, while Microsoft's share stood at 8.5 percent versus 9.7 percent in October 2007. Nielsen Online pegged Google's October search share at 61.2 percent followed by Yahoo at 16.9 percent and Microsoft at 11.4 percent.”
Also, the Wall Street Journal reports that Google plans to significantly reduce the number of contract workers it uses, but has no plans to lay off employees.
Original post:
From Silicon Alley Insider, Nov. 25, 2008:
While Google's market capitalization tanks and the company launches its first wave of cost-cutting, CEO Eric Schmidt is devoting much of his public-speaking time to pressing for green-energy stimulus plans and discussing the auto industry bailout. Technology, Media & Telecom Analyst speculates that this is because he is getting ready to take a position in the Obama Administration.
We have no inside knowledge here.
We would, however, note that, having grown Google to $20 billion in revenue over seven years, Eric has certainly earned the right to take a break. We would also note that there are many other reasons why this might be a good time to exit stage left (although a year ago, when the stock was at $700, would have been a much better time). To wit:
- He might be getting bored.
- He might be deciding that taking Google from $20 billion to $50 billion will be a much different job (and less fun) than taking it from $0 to $20 billion.
- He might be observing that the search product cycle is ending and Google has not yet found another product to drive the next wave of growth, which also might be less fun (especially if the company has to start firing people).
- Like Sergey and Larry, he might just be interested in doing something else — such as going into politics or solving the world's energy crisis.
Last year about this time, Larry Page held a conference call in which he announced that Google planned to launch a massive green energy initiative. As Larry described his thinking, it became clear that he wasn't just talking about putting solar panels on the roof — he actually wanted Google to solve the world's energy problems. When asked if this might be a bit far afield for a company in the Internet advertising business, Larry responded that if big companies wanted to get bigger they had to tackle big challenges.
For us, that was a wildly waving yellow flag: Life at Google had apparently been so easy for so long that the folks at the top had stopped thinking about how to kill their competitors and started thinking about how to solve the world's energy problems. Anytime that happens, the good times are likely coming to an end.
In the past 12 months, especially in the last 3 months, Google has been forced to refocus on the task at hand. This is unquestionably good for the company. But it may not be good for Eric, Larry, and Sergey.
Once you have mentally moved on to new challenges, it is hard to regain the tenacity and passion that got you in a position to move on in the first place. And solving the world's energy problems, though not a smart goal for an Internet search company, is certainly an admirable and worthy goal for anyone else. And folks as smart, talented, and wealthy as Eric, Larry, and Sergey are in a position to really make a difference.
All of which is to say: We would not be surprised to see Eric (or, for that matter, Larry or Sergey) step down from an operating role at Google next year to pursue other interests.
See Also:
Google (GOOG) Finally Gets a "SELL" Rating!
Google To "Significantly Reduce" Contractors -- Still
25 Comments
georgeg - Tuesday November 25, 2008 02:16PM EST
How strange a company that is based on advertising is having problems. Get Real... get us some real news. THEY GOT LUCKY in time. The leaders moving on to other things does not support stock value. GET SOMEONE ON ABOUT HOUSING... HOW ABOUT SOMEONE FROM THE BUILIDING INDUSTRY...
Brett - Tuesday November 25, 2008 02:32PM EST
He's spent too much time playing politics. And, besides that, I don't trust him. Google is now becoming part of Big Brother's spying apparatus.
Yahoo! Finance User - Tuesday November 25, 2008 02:34PM EST
"Man shall not live by bread alone."
Leslie - Tuesday November 25, 2008 02:36PM EST
Brad Pitt`s Tattoo is more important than the "WRITING ON THE WALL." The solution is a revolution in culture and not a tsunami of greenbacks. When we "get" what is vital and tune out what is NOT relevant to the survival of our way of lfe, MAYBE we will still have a chance..........
william - Tuesday November 25, 2008 02:43PM EST
I don't care if you provide the banks with 200 Trillion dollars they can not loan it to consumers who don't want it! It is not a credit lock down causing these problems it is an over-loaded consumer! DUH. Everytime our country has reduced taxes to this level we have had a great financial collapse! Check for yourself, rates were reduced in the 20's until the depression when they were returned to 90% on higher income levels where they stayed until the 80's tax reductions set us up again, raise taxes on the upper 1% who pay only 40% of the income taxes and eliminate the tax for the real consumer 50K-150K
william - Tuesday November 25, 2008 02:46PM EST
Google not worth anymore then MYSPACE which is owned by Rupert Murdoch and NWS corp. Ad revenue is based on page hits, MYSPACE has almost as many as Google! Google can be dominated if MSFT goes Cloud with apps on the net for free with ADs and MSFT should try and get every data owner hosted free and charge access to the info. .01 cents this revenue goes to the data owner to encourage them to change hosting sites and then MSFT owns all ad Revenue!
william - Tuesday November 25, 2008 02:48PM EST
Gm is getting bailed out one way or another! We will take on the unfunded retirement and medical benefits promised to the workers a generation ago that were never funded. I say that is fine however give us justice hang all the CEO's!
joej - Tuesday November 25, 2008 02:50PM EST
The Yahooization of Google is what Googmanagement feels threaten by.........but how to make it an interesting and fun place to hang out spending dollars is the question..........Search on Google......Play on Yahoo, MSN or Baidu!!!!! Google for all that it pretends to be in the hip world of the valley is still a little too rigid when it comes to having a good time......who would you rather go to a strip club with Sergi and Larry or Kid Rock and Howard Stern???
Yahoo! Finance User - Tuesday November 25, 2008 03:00PM EST
Too many people live too much in the past... Don't lie to the soul! The world is what our own hearts take to it....
Benjamin - Tuesday November 25, 2008 03:27PM EST
I don't understand how a company with 20 billion dollar revenues, substantial profit margins, and growing market share is "going down." And I'm not sure how one would connect green energy initiatives based on scientifically proven technologies with "violating" the laws of thermodynamics. I'm not sure why you're raving, furstlastname, but get a grip.
william - Tuesday November 25, 2008 03:35PM EST
What a bunch of morons, ECONOMICS 101 consumer drives economy, USA bailout charges consumers more taxes and gives money to failed instititutions? DUH? Lower taxes on working class and raise them on the top 5% earners. Problem solved don't be fooled by the rich telling you they will get you out of this if you DON'T tax them look at history everytime the rich get off scott free we have fianacial calamity! DUH!
Yahoo! Finance User - Tuesday November 25, 2008 03:43PM EST
WoW.....Find excuses for others but never for youself!
Paul L - Tuesday November 25, 2008 04:21PM EST
When you think you're smarter than anyone else, you're arrogant and change will not come to you. You will not succeed thereafter! To succeed is not to become arrogant!
RobotU - Tuesday November 25, 2008 05:41PM EST
What a terrible way to look at it. That's the problem with old industry, they think so linear. The only way to progress is to think and act in an exponential way. Google is in a terrific position to leverage not only loads of cash but the melting pot of good ideas that is Google. Google or another company with such ambition could be 10x or 100x larger than Google is now. Rather than solve an age old problem, create a new game that removes the old problem altogether, at the very root. Google isn't about a stock price, Google is the American dream fleshed out. The idea of what American and the rest of the world can achieve by simply getting rid of the tired old monopolies and shakedowns of the industrial revolution. Only the first shot has been fired of the information revolution..... It most certainly won't be televised. Worldwide-Revolution org.
MaryH - Tuesday November 25, 2008 09:50PM EST
Everyone knows Eric Schmidt must resign over the you tube deal, Obama would be making a severe mistake and harm his international reputation if he offered Eric Schmidt anything but the back of his hand. Eric Schmidt is a Scumbag
Rob Masters - Wednesday November 26, 2008 06:52AM EST
The most arrogant and despicable company. The Internet need more competition.
Want to post a comment? Sign in now to begin.
Recent Posts
Most Recommended
Copyright/IP Policy - Terms of Service - Privacy Policy - Help
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.
Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.
Furst - Tuesday November 25, 2008 02:10PM EST
Google is going down. Once the founders believe they are smarter than people in a business that they know nothing about, the end will be near. They can waste an enormous amount of money trying to find ways to violate the laws of thermodynamics. Hydrogen anyone?