Refreshing Google

The search giant looks to its start-up roots as it taps co-founder Larry Page for the top job

By Bill Saporito Monday, Feb. 07, 2011
    • Matthew Staver/Bloomberg/Getty Images

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    Like Microsoft, as Google has developed nonsearch businesses, it has found the going more difficult. Its Android mobile operating system is overtaking iPhone among new smart-phone users, but it won't be a money spinner. Chrome, its operating system designed for Web applications on PCs and tablets, has only 14.9% market share. And Google Buzz, which lets Gmail users share photos, links and opinions more broadly, has so far whiffed at the biggest wave on the Web, "social." Investors see more upside in Facebook. Groupon, the sizzling social-network-powered discount shopping site, recently told Google to shove its $6 billion buyout offer .

    Page's Social Challenge
    Page says Google is just getting going in social: "If you think about the next five years of what your life will be like online, socially, and what kinds of things, the tools we'll be able to do, we are only at the early, early stages. I'm incredibly excited about the possibilities." But in a broader sense, Google has to manage an issue that Stanford University business-school professor Charles O'Reilly labels ambidexterity — competing in both core and innovation markets simultaneously. This is a treacherous mission that many companies gag on. Kodak, for instance, anticipated digital photography but couldn't capitalize on it. But there are many others that have spotted market adjacencies and moved into them. Cisco, a hardware firm, now does teleconferencing, e-tailer Amazon is into Web hosting, and Netflix has branched out to Web streaming. Google is trying to make these sorts of leaps too but so far hasn't figured out how to generate searchlike profits on offerings such as YouTube, Android and Chrome.

    Still, if you accept the idea that Google needs a CEO who is better at exploring than exploiting, Page has those credentials. "Larry will now lead product development and technology strategy, his greatest strengths," Schmidt noted in his message announcing the change. Page is, after all, the guy whose PageRank algorithm (developed with Sergey Brin while they were Ph.D. candidates at Stanford), which ranked websites by page visits, set Google in motion. A computer-science geek to the very core, he also displays some of that species' less admired attributes: he's known to be impatient, introverted and curt to the point of rudeness in conversations. Don't expect much cheerleading.

    Page has said he wants Google to run more like the start-up it once was; he's enamored of the Skunk Works — type projects that produced Android, for instance. Start-ups are of necessity hyperfocused since they are chronically short of resources. And they think bigger than they ought to. "Page really believes it's easier to make progress on mega-ambitious dreams," says a source close to Google. Page uses the phrase "uncomfortably exciting ideas that can change the world." He's an enemy of incrementalism, but that's often what big companies settle for.

    Whether Google needs someone to invent the whip or crack it, the task facing Page is harder than the one that faced Schmidt. There's much more at stake as Google expands into new turf. "The unpleasant fact," says O'Reilly, "is that most organizations don't change without a crisis of some sort. IBM had theirs in 1992 to 1993. Google hasn't had one yet." Maybe Page will create an algorithm for that.

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