05:54 AM

Analysis: No Change At Google - Here's Why...

The departure of Eric Schmidt as CEO of Google has led to a lot of speculation about changes at the company as Larry Page moves back into that job in April.

But there will be no changes because there is essentially no change in the management of Google.

People forget that Mr Schmidt held the title of CEO in name only. The decision making was shared between the founders: Larry Page and Sergey Brin; and Mr Schmidt in what they termed a "triumvirate."

Here it is explained in extracts from Larry Page's 2004 Founders' IPO Letter:

Eric has the legal responsibilities of the CEO...


We run Google as a triumvirate. Sergey and I have worked closely together for the last eight years, five at Google. Eric, our CEO, joined Google three years ago. The three of us run the company collaboratively with Sergey and me as Presidents.


We hired Eric as a more experienced complement to Sergey and me to help us run the business.

Mr Schmidt always held the minority vote against Messrs Page and Brin. And there is nothing to suggest that they have dissolved their management structure beyond removing Mr Schmidt.

Mr Page gets to hold the CEO title for legal reasons but the power sharing with Mr Brin is still there. Both founders will continue to make the key decisions.

Why would we expect anything to change at Google if there is no new management?

The only thing that's changed is that the founders have regained some of their lost dignity. Mr Schmidt was brought in as CEO to provide the founders with "adult supervision" as he termed it. Google's chief investors believed that the coming IPO would do better if a veteran Silicon Valley executive was seen to be at the helm.

Continuing to have "adult supervision" ten years later when you are nearly 38 years old must be embarrassing for the founders. Especially since wonder kid Mark Zuckerberg has been doing great without having any official adult supervision. He's tripled the value of Facebook in less than a year and he's just 26.

This is the real reason Mr Schmidt was shifted, imho. And it's all plain to see in Mr Schmidt's tweeted announcement:

"Day-to-day adult supervision no longer needed!"