Friday, January 21, 2011

Farewell to the Gaffer-in-Chief

As everyone knows by now, Eric Schmidt announced Thursday that he is stepping up out of CEO to become executive chairman. He will be replaced as CEO by co-founder (and former CEO) Larry Page.

What I found remarkable was the reaction of a friend of mine, who in response to my email about the announcement, wrote:

Eric was supposed to be the public face of GOOG, but he turned out to be ill-suited for that role---and less so as time went on. This past year? One blooper after another.
I hadn’t been paying much attention to Schmidt, so I was very surprised to see how gaffe-prone he has been.

Sure enough, in the last six months or so there were lists of Schmidt verbal boo-boos. His planned retirement brought gaffe compilations by Gizmodo and All Things Digital. Earlier lists include BuzzFeed, State of Search and Business Insider.

Many of these gaffes revolve around the issue of privacy, including these:
  • “Streetview, we drive exactly once. So you can just move, right?”
  • “Show us 14 photos of yourself and we can identify who you are. You think you don’t have 14 photos of yourself on the internet? You’ve got Facebook photos!”
  • “Just remember when you post something, the computers remember forever”
  • “I don't believe society understands what happens when everything is available, knowable and recorded by everyone all the time.”
  • “We Know Where You Are. We Know Where You've Been. We Can More Or Less Know What You're Thinking About.”
  • “The Google policy on a lot of things is to get right up to the creepy line and not cross it.”
In fact, “creepy” seems to be the most commonly used term for the philosophy that Schmidt has been articulating. This concern is over and above the reality of Google’s business, including its plans to (using those Facebook pictures) do facial recognition.

However, Schmidt is a noted hypocrite when it comes to the value of privacy. The official response of Google’s relentless invasion of privacy is “trust us — we do no evil”. But when a reporter used Google to research Schmidt’s personal life, the retaliation was swift and unequivocal.

So in the end, I think as a hired CEO, Schmidt was unsuited by temperament to be the public face of a market-dominant company, and all the attendant scrutiny. This is not something he experienced the head of a dying proprietary software company or being CTO of the leading company in a highly fragmented Unix market.

All the little companies that grew big had to come to grips with not being little any more: Microsoft, Intel, Apple, Google and now Facebook. Antitrust law (as well as public sentiment and populist politicians) draws a clear distinction between aggressive small companies and bullying by dominant companies, and Google’s relentless march towards Total World Domination has understandably earned it the scrutiny that IBM or Microsoft once enjoyed with people like ambitious EU bureaucrats.

Still, I think Google’s new CEO can make this argument more convincingly and sincerely. At any tech company, founder-CEO seems to have a legitimacy — and a vision — that the hired gun does not. When a Hewlett or Packard or Jobs says “we mean well” it is more plausible than from one of the few people to become a billionaire through employee stock options. (For some reason, Bill Gates was a far less convincing witness as to his firm’s benign intentions.)

So will the change in leadership solve Google’s PR problems? I don’t think so: their goal is still to crush Yahoo, Facebook, Microsoft and Apple, while commoditizing Nokia, Apple, Verizon, AT&T and dozens of other companies. You can’t march to Total World Domination without climbing over a few bodies, and right now Google’s growth depends on expanding its domination in existing segments and expanding that dominance to new segments.

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