Thursday, January 20, 2011

Time to Market: Google's Schmidt Heads Upstairs to Accelerate Growth

Eric's upstairs in the boardroom, now. The decks are clear for Sergei to dream up great stuff and Larry to execute.

It's not that Eric Schmidt has been a bad CEO of Google. Heck, think of where this company was just a few years ago when a dutch auction of a portion of Google's worth was parceled out to lucky investors in public stock markets. Back then, you were betting on a search engine with a few funky tech bits hanging off the side. Today, that's an investment in a leading mobile smart phone platform, a tablet platform, a voice platform, a video platform, a leading browser, a satellite and street imaging platform, a car-driving platform (?) and more funky experiments than you can shake a stick at. Back then, some analysts were spooning about the fearsome "Google/Yahoo/Microsoft" triumvirate based on the power of search engines and content aggregation. Today social media and content and apps ecommerce from Apple and Amazon have changed that era's assumptions about digital content value and discovery radically.

And back then, people were worried about Google having enough "adults" in the house to keep it focused on sustainable growth. Today, there appears to be a lack of youth in the house that's able to push out good products fast enough to keep up with a broader and more complex marketplace for content and technology services. Wall Street and Hollywood are lionizing the growth of Mark Zuckerberg's Facebook social media empire as the paradigm of growth, spurring investors on both U.S. coasts to start unfolding their wallets. As I noted on my Content Nation blog, Facebook grinds out product reliably and keeps the focus on tuning its social media machine in tight iterations. Google's getting better at this, but they need to pick up the pace.

And oh yes, there was that little fumble with the social media strategy. First Wave. Then Buzz. Then, not so much Wave. Then, what happened to Buzz? Then, redo. Then, redo the redo. Then...we'll get back to you, we promise. In the meantime, Facebook started to trump Google in the ratings wars. You can't put the social media slips all at the feet of Eric Schmidt, but with so many complex moving pieces in Google's plans requiring a strong sense of where social media is headed, it's not always good to have someone at the helm who seems most comfortable romancing "adults" in the content industry who are holding on to ever-smaller slices of the content market pie.

And then there's Africa. Or, more to the point, most every developing nation in the world. Google has a golden opportunity to position its technologies and services very competitively in emerging markets that used to be ignored by many major media companies. The global economy's growth is going to rely ever more heavily on enabling prosperity in places that have been long ignored, offering entry points for Western brands. Google is one of the most trusted brands in the world, in part because it has been the one associated most with the concept of freedom of access to information, albeit with some hedging for politicians and business partners.

A recent post on Google's official blog about enabling software downloads for Iran ends tellingly: "Our products are specifically designed to help people create, communicate, share opinions and find information. And we believe that more available products means more choice, more freedom, and ultimately more power for individuals in Iran and across the globe." While there may be some political overtones to that statement, it is first and foremost a branding statement. Google wants to be the brand that's embraced by a new wave of consumers and entrepreneurs that is hitting the beach rapidly as people armed with mobile Web services begin to transform cultures and economies around the world. Google works with big companies and affluent technophiles who will help to build their brand, but its essence is to service markets bottom-up. Well, the bottom is about to grow far faster worldwide.

In this sort of environment, having someone who plays a good hand at Davos summits and in boardrooms and the halls of government  is probably not the best choice for projecting your global brand. A good person to have as Chairman of the Board, to be sure, but not your go-to image person.  The tousle-haired Harvard dropout look charmed first a Microsoft generation and now a Facebook generation. Google wants us to look in the mirror and see the Google generation, but it needs a younger sensibility to encourage their target markets to do that. Better to give up on a 20-year plan (divide by Internet years anyway) to rule a company together and to profit from a 20-year plan to rule the markets that people believe in.

None of this is likely to lead to major perceived changes in Google's strategy soon. Schmidt has been moving further back in the executive decision making process for a while, if you can believe some reports. Many other executive shifts recently at Google have pointed towards decision-making streamlining at other levels, too, so this is more a final piece falling in to place rather than the start of a major upheaval, it would seem. Much depends on Google meeting expectation key product launches this year for tablets, mobile payments, social media and search enhancements. Best to give Schmidt a portfolio that can keep him in Washington, New York, Beijing and other strategic places and allow the folks in Mountain View and around the world to be...Google.
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