Although, Eric Schmidt’s role as “Adult Supervisor” has been joked about, the stability he brought to the company did hold some intrinsic value. Not only is he leaving as the most popular Tech CEO with his employees, he was a grounding force for Google’s more outlandish founders.
In comments to NPR, Inside the Plex author Stephen Levy says that things at Google are going to get wilder.
“I think Larry will do things differently,” Levy says. “But in a way, Larry’s values have always been the core values of Google. Even while Eric was CEO, it was Larry whose obsession with speed and scale and ambition and artificial intelligence — those were the things that Google engineers held up as ideals there. Eric’s job was to sit back with a rudder and steer that ambition and those huge goals and sometimes audacious projects that Larry would set Google on. So it will be interesting to see what happens when Eric’s hand doesn’t really reach over to Larry’s shoulder and say, ‘Maybe, Larry, not now,’ which has happened a lot over the years.”
Page has been seen as the “geek visionary” of Google since its inception, coming up with many of the company’s most creative ideas. Levy says that trend will continue, along with even bigger, bolder projects.
“We’ll expect more of what they call ‘moon shots’ from Google. These are things that most outsiders would say is beyond what Google should be doing,”
Colin W. Gillis at BCG Partners thinks this may hurt Google’s share price. His thinking is that Page will be less focused on the bottom line, and investments will take priority over profits. His five concerns with a Page-led Google are:
TRUST. Google is increasingly perceived as a company that consumers should be concerned about trusting with the large amount of data that it collects. Partners are also wary of Google in our opinion.
FOCUS. We are interested to see if new CEO Larry Page can tighten the focus of the companywhile also boosting its innovation in its core businesses, a difficult balance.
EXPENSES. Our EPS estimate is below consensus increase in its expense base due to the across the board 10% lift in salaries and the associated ripple effect such as taxes, benefits, 401Kcontributions, and increased costs associated with hiring new employees.
REVENUE. The company is moving back into the seasonally more difficult part first half of the year – and while click pricing remains solid, the impact of cleaning up its search results frequently comes at the cost of lost revenue from the ad-filled sites that have been demoted.Finally the company is also facing more difficult growth comparisons as results are now past the one year anniversary of the economic recovery from the 2008 recession.
BRANDS. Google still is not an effective partner to many large brands in our opinion, and we are interested to see if this changes for the better or worse under the new CEO.
Therefore, Gillis/BCG has a HOLD rating on Google.
For an idea of what Larry Page thinks about, have a listen (the video and audio aren’t synched very well) of Larry Page’s hour long talk at the American Association for the Advancement of Science in 2007.