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Larry's First Day: Exec. Quits, Spends $900M - Grade? Maybe +1

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Larry Page took over CEO duties at Google again yesterday and what a busy day it was for the creator of the confusingly-named PageRank. As numerous analysts have pointed out, Sergey Brin and Page have come a long way from founding the dominant search engine, which outgoing CEO Eric Schmidt provided 11 years of exceptional service to as CEO, helping build the company into the major business it is today.

Schmidt officially stood down yesterday, though he will remain on the Google board of directors as executive chairman and deal with external issues, such as government relations and overseeing large scale deals. Page will handle the day-to-day operations and internal development of the company.

Insights to Page's intentions may have been laid out in his Google Faculty Summit 2009 presentation, as seen below.

His first day was met with the departure of Google's SVP of product management Jonathan Rosenberg. Page will be hands on in the product area so maybe Rosenberg stood down to avoid confrontation, though he had been with the company since 2002 and would have made some serious money through his stock options.

Business Insider reported:

"Word from a source close to the situation is that Rosenberg wanted to work at Google until his high school-aged daughter left for college, but that new Google CEO Larry Page wanted longer term commitments from his senior executives.

Given that Rosenberg couldn't commit for the long term, the two decided to make the change sooner rather than later.

It's also possible that Page may have viewed Rosenberg as redundant. Much of Rosenberg's job under Google's old CEO, Eric Schmidt, was to run interference between product managers and top executives."

The company also announced that it had offered $900 million for the patent portfolio of Nortel - a company currently auctioning off its assets to pay creditors in its bankruptcy.

"The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation. Some of these lawsuits have been filed by people or companies that have never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival's new technology... But as things stand today, one of a company's best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories..."

Google seems to be having a hard time gaining any stock price momentum regardless of the type of news being written about the company, Forbes reported. Good news hasn't helped increase the stock price, and Forbes suggests the company may have hit a wall as far as global popularity is concerned. The SenseNews graph below shows that news good or bad just seems to lower the company's stock price.

news-price-google.JPG

Forbes sees Page as:

"a believer in systemic innovation, that is, the need to undertake the research and transformation tasks that shift the world into a different gear. Few CEOs stick their neck out like that, so his new role is potentially exciting for innovation watchers. Does Google contribute to system-wide innovation right now? Gmail is not a systemic innovation and Google Apps are kind of like other apps. Android didn't fire up the smartphone industy, although it did accelerate it. Adwords for me stands out as Google's prime achievement in innovation. But as a WIRED profile said recently Page's ambition is "to improve the conditions of the planet at large."

So now Page has an unwieldy corporate beast that has had a hard time replicating its success beyond search - both organic and paid. Their push in to social and some major changes to their algorithm recently that has many complaining may see a backlash for Google.

The EU has been investigating how Google interacts with its algorithm and the possibility of antitrust. And their acquisition of the travel platform ITA has generated another antitrust issue.

So for a first day grade, I give Page a +1 -- what exactly that is worth has yet to be determined, so it seems appropriate. His commencement speech to University of Michigan graduates May 2009 gives a good perspective he has for the future - now as the CEO he has a chance to implement it.


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