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Summary:

This week, Larry Page took back the reins of Google. In his first task as CEO, Page has shaken up the executive ranks in a reorg that’s about addressing two of Google’s big challenges: its overcomplicated bureaucratic structure and Facebook.

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This week, Larry Page took back the reins of Google, the company he co-founded with Sergey Brin a lifetime ago, replacing longtime chief executive Eric Schmidt, now chairman of Google. In his first task as CEO, Page has shaken up the executive ranks in a reorg that’s about addressing two of Google’s big challenges: its overcomplicated bureaucratic structure and Facebook.

Since my colleague Mathew Ingram has written about why Page can’t bully his company into being social, I’m going to stay away from that topic, mostly because I agree with him. Instead, let’s look at the re-org. As part of this executive revamp, Larry did the following:

  • Got rid of a product czar, aka Jonathan Rosenberg.
  • Distributed the power and accountability to seven executives, who are responsible for certain domains.

Here’s the breakdown of who’s doing what at Google, according to Jessica Guynn at the Los Angeles Times, who first reported the story:

  • Andy Rubin, SVP of mobile
  • Vic Gundotra, SVP of social
  • Sundar Pichai, SVP of Chrome
  • Salar Kamangar, SVP of YouTube and video
  • Alan Eustace, SVP of search
  • Susan Wojcicki, SVP of ads
  • Jeff Huber, SVP of local & commerce

Page’s first attempt at turning the company around makes perfect sense to me. Today’s Google is like a leaky, aging supertanker that’s being rocked by rough seas (Apple) and being ripped apart by raging winds (Facebook). Google has the same problem most established and near-monopolies have: It’s looking inward and is too married to its business models. As a result, it tend to miss the big picture.

Just as media companies often miss opportunities because they can’t understand they’re in the information business, or educational institutions that can’t learn the basic reality that they’re in the “learning” business, Google has missed the big picture.

The Big Picture

The biggest problem facing Google is that it can’t think beyond PageRank. Why should it? It’s what Brin and Page built, and it turned Google into a gusher of money. It has become a part of the company’s DNA, and changing that is pretty tough.

Google’s stated mission “is to organize the world’s information and make it universally accessible and useful.” Unfortunately, the company has gotten stuck on that vision from the perspective of  “search” to such an extent that it can’t see beyond its own definition of search. Here’s what I think the  company needs to do:

  • Remember the company is “organizing” the world’s information, and not a search box.
  • Realize that “search” was essentially developed for a digital world that was organized in files and folders, a methodology that doesn’t quite work in the fast growing, always-expanding Internet.
  • Re-focus on what made Google delightful in the past: finding us things we needed on the web, without much disruption. If that means looking beyond the search box, it should do that.

That means the company has one product whose core mission is to help find what we’re looking for. Whether that means Google has to use its algorithm, Twitter’s social signals, its own social-validation tools (YouTube etc.), mobile location data or all of them together,  it doesn’t really matter. But it needs to stop thinking about things in just the context of search and start thinking about how it can help us find the “information” we need.

The New Team

If you look at the recently promoted team, you can see they are heading up product groups which, in theory, should be building towards a unified product called Google, whose core value proposition should be helping us find information, with or without the search box.

They are all engineers and most (if not all) of them have a proven track record as product people. If you read this Fast Company story, it’s pretty clear that most of these folks owe their allegiance to Page and are his go-to-people for him to get things done. I think that’s crucial for the company as it starts to become more streamlined and starts to engage in hand-to-hand combat with younger (Facebook) and nimbler (Apple) competitors.

However, for Page, this should be just the start. He needs to hire people who challenge Google’s conventional, metrics-driven approach to the world. In other words, Page needs a senior vice president of happiness. Now this SVP is not a real person, because what I’m arguing for is an ideology and an approach to building the next generation of Google products that focus on “finding” us stuff we want. As I wrote earlier, “they need to think so differently that they need to hire people who are very unlike them,” and what they need are “creatives — the ones who don’t necessarily have computer science degrees.”

  1. “what they need are “creatives”
    Yep, yep, yep – Been beating that right-brain thing in my Twitter stream for quite some time – As Job’s says, the intersection of computer science and liberal arts.
    Not sure Page will ever understand that though.

  2. According to the article: “They are all engineers and most (if not all) of them have a proven track record as product people….” Really??

    Gundotra while he was at Microsoft was never responsible for product development, rather he was Microsoft’s version of Guy Kawasaki: an incredibly slick, charismatic Evangelist for .NET. Never was he responsible for product division P&Ls. When he was hired by Google at such a senior “Engineering” role, many execs at Microsoft laughed their heads off. Granted: a brilliant coup on his part. But an incredibly poor reflection of Google’s perspective on actual experience vs. showmanship.

    Even were this to be false or bombastic (which I’d still challenge anyone who has worked in the exec ranks at Microsoft to dispute), Gundotra’s lack of “proven track record” as a “product person” at Google is clear. He was never “in charge” of Android development, although he promoted the image that he was. Maybe in charge of the Google Campfires and glitzy developer conferences. But I challenge anyone to provide evidence of his product development expertise.

    1. Hence my remark “most not all” are product people :-)

      1. Om

        You mention product people .. What do you think about the lack of Marissa Mayer’s name? I thought she was a very important part of the Google ecosystem yet she is not mentioned in the reorganization at all.

  3. rem. IBM & Microsoft, everyone feared them. Google’s core DNA is search, and they will never ‘get’ social networking like FB. similarly, FB will throw money and try to catch the next wave, whatever it is, and likely fail b/c it’s a social networking company. the cycles of dominance just keep getting shorter.

  4. nimbler (Apple) competitors? Google’s Android is kicking Apple’s iPhone to the curb- hard

    1. Hard? No, it’s done well as the only smartphone on Verizon but absolutely no numbers have been reported since iPhone became available. Both Apple & Verizon report later this month so then we’ll see what the effect is.
      And, android is really only a credible phone, Apple has a whole complete platform built around iOS/OSx and Google is having a hard time keeping up.

      1. I don’t think they have a hard time keeping up. They are as behind in tablets as they were in smartphones when Android launched. I agree they should try to do more things “first” instead of always being 18 months behind Apple, though. I think Google TV was such an attempt (Apple TV doesn’t really count, especially the old one), but they didn’t get it right from first try. They should’ve focused on ARM chips from the beginning for lower costs, too, and I hope they will do the same with Chrome OS/.

      2. Yes but Lucian, the tablet market and the handset market are two entirely different animals. The iPad is more like iPod/iMac with totally different distribution channels and most importantly, no subsidies. And, apps are even more important. So, android is way behind in tablets in every aspect.

    2. relentlessfocus Tim Saturday, April 9, 2011

      Android isn’t kicking iPhone to the curb at all. You are confusing market share with profitability and they aren’t the same. Remember, Android is open source, as an OS it doesn’t earn much money in the bigger scheme of things, the purpose of Android for Google is as an advertising vehicle. Of all the handset makers Apple is by far the most profitable, by orders of magnitude. In fact only HTC is really healthy on Android sales. Motorola Mobility is in deep financial difficulty and have predicted that next quarter’s revenue will be down. LG is barely breaking even in smartphones. Sony is also struggling to break even as a phone maker. Apple takes in something like 45% of all mobile phone revenues and their profit margin on the iPhone remains quite healthy. Apple’s y/y revenue from iPhone alone is $38 billion compared to Google’s advertising revenue from Android at $1 billion y/y.

    3. Apple’s complete platform built around iOS/OSx hasn’t halted the iPod sales decline, nor helped Apple’s ebooks effort (is there still one?) against the Kindle platform, nor enabled Apple’s video/TV hobbies to dent Netflix.

      Apple won’t sustain its very recent levels of profitability as the network effect of the dominant Android marketshare makes the Apple iPad and cashcow iPhone irrelevant. Apple had to be bailed out by Microsoft when it lost the desktop to Windows, and Apple just lost mobile to Google.

      1. That paltry $150M Microsoft investment didn’t exactly “bail them out”. Are you aware that Microsoft invested $200M in Best Buy during that same period and that’s never portrayed as “bailing” out BBY. Microsoft got something for both investments. The sub story is they got off the hook for blatantly stealing Quicktime code. What Apple did need however, more than the $150, was a Microsoft commitment to Mac/Office and that got that.

        Where is that “dominant” android marketshare other than possibly in handsets in the U.S.?

  5. Oops!! productivity tools for corporates, Google Apps, etc all gone with the wind ? I thought big money was still in the cloud. Guess it wants to shower only on the Bald Man in Redmond ;-)

    Android – Great Effort, Go Kill Others.
    Ads & Search – No competitor yet. Cheers!
    Social – Use Engineering Talent and not a +1 button for Spammers and if you expect people to Login to Google and Rate +1, Good Luck. Just wondering, why can’t Google write a Search Application on Facebook so that you can index a user & his friends’ data and let him be able to search.
    YouTube – IMO, this is your Social. Think :-)
    Search – Weed out the Spammers because your Happiness lies here ;-)

  6. Om wrote: ” the next generation of Google products that focus on “finding” us stuff we want.”

    I have no idea what the above statement means. As far as I know, Google is doing a fine job of helping me and everybody else in the world find what we want. Often within seconds. And it looks like there will be no competitor (more about this below) who will come close to touching Google for many years to come.

    What do you mean by finding what we want without the Google search box? Do you want to go to Google.com and have it automatically guess what you might be looking for BEFORE you enter a search term? I wish you’d be more clear about what exactly you want from Google. What “disruption” are you experiencing in Google search right now? As it stands now now, this article sounds like so much esoteric incantation. It doesn’t have the typical Om Malik clarity.

    Apple is rocking Google? Last I checked, Android (just ONE of Google’s products) was busy stealing Apple’s lunch. And, Google didn’t even have to manufacture or market real phones in order to do so. It just supplied the software and other companies around the world are falling over themselves to help Google beat Apple. The best part about this story? Google doesn’t even WANT to beat Apple. Apple is so insignificant, it is just becoming collateral damage to Google’s objective of providing people an easy way to access its products and services through mobile devices. Get it? Apple is just collateral damage to Google, not even a real competitor.

    FB is ripping Google apart with raging winds? What a joke! FB will NEVER catch up with Google in helping me find stuff I want. Just a few minutes ago, I was looking for a Spanish movie whose trailer I had seen, but did not remember the title. All I knew was the basic premise of the movie. I asked Google and got the answer. The day FB can do this, I will eat my shoes. I can tell you this – almost NONE of my friends on FB or any other social network would have known the answer. Even if they did, I wouldn’t have been able to find it from them as quickly as I did from Google.

    1. Appreciate some of your points but I like the tone of OM’s post. Disruptive is not more of the same and Google should be disruptive in its mindset and new products.

    2. Very valid points, This article seems to be written by some hate blooger like MG Siegler or M Arrington rather than respected journalist like Om Malik. The Apple and facebook parts were the funniest, i cant imagine how you might think Apple is damaging google, when google search is the default on all apple products; and facebook is a social network, not a search engine.

  7. relentlessfocus Saturday, April 9, 2011

    I don’t agree, OM. “Organising the world’s information” may have been a convenient talking point at one point but Google, like any company is about revenue. Google became a huge money spinner because it perfectly caught the disruptive wave in advertising as advertising shifted from TV, magazines and newspapers to the web. On that front its now being seriously challenged by Facebook and soon Twitter. But advertising money is again being disrupted and this time to the mobile web. Unfortunately for Google the pot of ad money hasn’t increased but where that money is spent is shifting from the web to mobile. And unfortunately for Google the competition it faces in mobile advertising includes Apple (Quattro), Microsoft (Screentonic), Millenial, Nokia (Enpocket), AOL (Third Screen Media) and others so while the advertising pie isn’t growing by leaps and bounds, the competition is.

    If you look at the reorg, the areas of responsibility tell you about areas where Google hopes to increase revenue (they’re a company not a religion). All of those are still about advertising. The markets (stocks) don’t believe that Google can go grow without a fresh revenue stream and thus its stock is actually down over the past 12 months.

    The current reorg tells us what Larry Page thinks is important in his vision of Google. He has defined the playing fields, we can expect more social, more Chrome, more Android, more video but can Google maintain their powerful grip on advertising and more importantly grow beyond it? That surely remains a troubling question mark.

  8. Before Google’s rise, I remember thinking what a powerful company Yahoo was, and how it seemed unassailable.

    Now Yahoo is a relic of its former self. The same could happen to Google.

    People habitually use the same search engine, which keeps them coming back, but they don’t actually have much loyalty to any search engine. That’s why Google was able to overthrow Yahoo. If something clearly better came a long, people would leave Google and go to it (Bing is not yet clearly better).

    So Google’s empire is built upon a mere algorithm. That’s an unstable foundation.

  9. @ScottRCrawford Saturday, April 9, 2011

    Excellent. Only thing I’d add is that while “this SVP is not a real person” could be true, the company should learn to envision a very real person experiencing Googliness at the very center of all it does. This is the hallmark discipline of great and enduring sales+service orgs. Organizing the world’s info for the benefit of a living, breathing, enriched and grateful individual is a different experience –with greater psychic rewardes– than merely organizing information for the sake of it.

  10. fabianschonholz Saturday, April 9, 2011

    What I like about the re-org, successful or not, is the fact that Google is growing up. What I mean is that if a company remains stagnant it dies and the re-org is about breaking stagnation. It is about reactivating the idea mill. I wrote about this in this post back in 2007:
    http://fabianschonholz.com/2007/09/30/innovation-in-technology/

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