In 2011, Ben Horowitz, a prominent venture capitalist and Silicon Valley magnate, wrote a famous article about “war TIME CEOs” when he predicted that Google co-founder Larry Page would move from Eric Schmidt. Schmidt took over as Google’s wartime CEO. “This is going to be a profound change for Google and for the technology industry as a whole,” Horowitz wrote. “
But what he said was not entirely accurate.
Page did take over as CEO from Schmidt. But in the next less than five years, Mr. Page, who wields power, restructured the company, including turning Google into a subsidiary of Alphabet. Mr Page then put Sundar Pichai, an engineer-turned-manager, on Google’s CEO position, putting him in charge of search, Android, YouTube, Chrome, hardware, cloud computing and all of Google’s other core businesses.
Page became Alphabet’s CEO and took a back seat to esoteric long-term projects such as hot air balloons with Internet access and self-driving cars, which were restructured into separate companies and formed a financial sector that became “Other Bets.” Page, who disappeared from the public eye and stopped talking to the media, disappeared from the public eye during a Google earnings conference call.
On Tuesday, four years after Alphabet’s founding, Page and his co-founder, Alphabet’s president, Sergey Brin, announced their retirement, and Mr. Pichai’s position was promoted again. Pichai’s future role will no longer be just Google’s CEO, but will become CEO of Alphabet as a whole.
Pichai is a gentle man who is respected by both engineers and non-technical staff. The engineer-born executive has the advantages of calmness, professionalism and extraordinary personal charm. In various team activities, he often surprises employees with a big smile, many of whom see him as “his own.”
But as Google embarks on a huge revolution, the value that is seen as “own” to Pichai may come to an end, a change that could change the company’s course.
Calm inglised employees
At the company’s general meeting in October, Mr Pichai made it clear for the first time that things had changed.
“We’re trying to solve some of the problems — massive transparency,” Pichai said in a video obtained by The Washington Post. Soon after, the company scaled back the number of meetings, changing it to once a week.
This moment culminated in years of escalating staff unrest.
Last fall, the New York Times reported that executives, including Mr. Pichai, had signed a document paying $90 mare to Andy Rubin, the founder of Android, despite credible allegations of sexual misconduct. And other well-loved executives have been treated in a similar way in the past. The incident triggered a company-wide strike, with some 20,000 employees walking out of offices last fall and taking to the streets to protest against the company. The incident also sparked other protests, with a large number of employees protesting against every problematic policy in the company, including government contracts and job hires.
This summer, Google abandoned a contract with the Defense Department called Project Maven after employees protested that it was using surveillance tools to analyze drone footage. In October, Google pulled out of competition for another $10 billion Pentagon calculation contract, saying it could conflict with the company’s values.
In the wake of these protests, Google shut down its long-standing “open” channels of communication, such as banning political discussions, canceling weekly TGIF meetings, becoming monthly, and setting up separate forums.
Today, the company’s employee trust has fallen to a low level, and some Google employees are now investigating their own human resources department, accusing the company’s leadership of creating a tool to monitor employees, according to Bloomberg. Mr. Pichai is now facing threats to set up a guild of employees and a lawsuit from former employees who have fired them for allegedly leaking secrets, and who say the real reason they were fired was because they were trying to unite other employees.
Mr Pichai is also busy dealing with increasingly stringent regulatory scrutiny. Under Schmidt’s leadership, Google successfully fended off an FTC investigation in 2011 that had little lasting impact on the company. But things are different now, and politicians are increasingly turning their attention to Silicon Valley.
Antitrust regulators in the U.S. and other countries have been ramping up their scrutiny of Google over the past few months, and have repeatedly named Mr. Pichai to cooperate with the investigation. The U.S. Justice Department announced last quarter that it would launch a massive antitrust review of big technology companies, including Google, and launched a separate antitrust investigation into Google. The U.S. Department of Justice’s potential investigation, backed by nearly 50 state prosecutors, has also greatly increased the pressure on Google.
Candidates for the 2020 presidential election have also begun to take a hard look at Google, with candidates referring to the company by name in the Democratic debate as too powerful. If Democratic Senator Elizabeth Warren wins the nomination and ultimately wins the election, Google will have to fight a president who has promised to split the company.
Find Alphabet’s “Next Direction”
When Steve Jobs was Apple’s wartime CEO, the company was on the brink of bankruptcy. Although Google is far from bankruptcy, it still faces the biggest and most direct business challenge ever: finding the next step.
Alphabet is bracing for a slowdown in growth in its core digital advertising business, which still accounts for the bulk of revenue. Alphabet’s advertising revenue slowed in the first quarter of 2019 and third-quarter profit declined from a year earlier.
Google has been groping for years in the cloud computing market, but they still lag behind Microsoft and Amazon. The company’s recent contract with the hospital chain, Ascension, was supposed to be a victory, but it turned into a failed public relations exercise, raising questions about Google’s ability to protect all patients’ data and how it would use it. Even though Google made it clear that it would not use any patient information for its own purposes, the questioning did not go away, leading congress to ask Google more questions.
The outside questions have even influenced Google’s acquisition. Google bought Fitbit for $2 billion, but privacy groups and members of Congress have called on federal regulators to review the acquisition in more detail, and Google hopes to complete the deal by early 2020. According to media reports, many consumers began to lose their Fitbit devices after Google announced the acquisition.
While struggling to find new substantive businesses, the company has also proposed some puzzling new businesses that have little to do with the company’s profits, such as search algorithm updates and quantum computing milestones.
Pichai should take some responsibility for the company’s current situation. He was nominally in charge of Google’s core business during a period of staff turmoil, government censorship and slowing growth.
But under Page and Brin’s wing, Pichai doesn’t need to take full responsibility for the company’s problems, whether it’s corporate culture or the company’s strategy.
Now that Page and Brin have left their start-ups entirely to Pichai, the two founders will begin to act as bystanders, and Mr Pichai must make all the necessary, difficult decisions to position Google for its next development.
At least in theory it should be like this. The reality may be different, for example, in the early 2000s, when Bill Gates handed the CEO job to Steve Ballmer, but Gates remains the company’s largest shareholder. Over the next decade, Gates remains in control of the company, especially in key products such as Windows. Eventually Gates let go, but it took Microsoft a while to get rid of his rule completely.
Like Ballmer, Pichai is the successor to the company’s founder, Chin Dot, and Alphabet’s shareholders should expect Pichai to do better than Mr. Ballmer.