Sundar Pichai took over the “worst” position in Silicon Valley on December 5th. On Tuesday, Alphabet, Google’s parent company, announced the shocking news: Google co-founders Larry Page and Sergey Brin both announced their resignations, and 47-year-old Sandal Pichai will take over as CEO of parent alphabet.
Four years ago, Page hatched the most talented retirement in business history. Tired of Google’s daily chores, he split Google into “other bets”, splitting the company into subsidiaries to explore science projects such as autonomous driving and smart cities, leaving the main Internet search business to his trusted deputy, Pichai.
For the past few years, Page and Brin have actually been evading public scrutiny and most of Alphabet’s employees, and now their departure coincides with the company’s biggest challenge in its history.
Pichai was assigned to lead Alphabet through the storm, while Page and Brin avoided all censorship and challenges.
Even as Alphabet’s new leader, Mr Pichai faces a dilemma.
In addition to running Google, Pichai has been tasked with managing Alphabet’s “Other Bets” investments, but it’s all a bit of a loss-making project. Google, for example, is working on a project aimed at achieving its Internet connection goals by using high-altitude balloons. None of these “bets” are expected to become Alphabet’s main business.
Google remains Alphabet’s cash cow, thanks to its lucrative digital advertising business. There is no sign that the next Google will soon grow from another “bet”.
Pichai’s task now is to decide how to handle the investment decisions of Alphabet’s useless projects.
Mr Page and Mr Brin still hold a controlling stake in Alphabet and said they would remain “active” on the board. If Pichai decides it’s time to cut some other “bet” investments, he could still lose out to Page and Brin in the polls.
If Mr Pichai wants to persuade them to put their favorite science projects on hold and focus instead on how to keep Google’s business growing, good luck to him.
In addition to the power strugglebetween Page, Brin and Pichai, Google faces a crisis after staff protests to antitrust investigations that could split the company.
Growth in Google’s core digital advertising business is slowing and pressure is mounting to find new areas of expansion. While Google’s cloud computing and hardware businesses show some promise, they account for only a small portion of Google’s total revenue. Google’s core remains an advertising agency.
Faced with more scrutiny by U.S. government officials and regulators, Google’s new boss, Mr. Pichai, faces a battle by various government agencies to punish his company. It is fair to say that Page and Brin chose a perfect time to quit their jobs to save themselves from the crisis.