Has Google's Larry Page lost the plot?

By surrounding himself with yes-men and killing off anything that doesn't make money, the CEO could be setting himself up for a fall.

By TheStreet Staff Mar 18, 2013 7:01PM

thestreetlogoCEOBy Dana Blackenhorn

 

Every great company is a dictatorship. But no dictator can run a great company alone.

 

While much of the media commentary on Google (GOOG) late last week centered on its closure of Google Reader, the bigger news is the replacement of Android chief Andy Rubin with ChromeOS head Sundar Pichai, as reported by Wired.

 

Pichai is said to be "closer" to CEO Larry Page than Rubin was, and it's no longer questioned that Marissa Mayer, now CEO of rival Yahoo! (YHOO), didn't jump from the Googleplex but was pushed out by Page.

 

So the question becomes, is "focus" just another term for all power flowing through the CEO's hands? Is that CEO head now to be surrounded only by yes-men? 

Pride goes before a fall, and Page has a lot to be proud about. He co-founded Google alongside fellow Stanford grad student Sergey Brin, and in 15 years has built a company that is now bigger, in market cap, than either Microsoft (MSFT) or IBM (IBM).

 

He did it with a relentless focus on one metric -- the cost of managing and moving huge mountains of data. Over the last decade Google pioneered the use of commodity PCs over high-end servers, bought dark fiber at the bottom of the dot-com recession, built a network of data centers to bring content closer to users, and pioneered in renewable energy to lower costs still further.


What's been lost 

All this gave Google an incentive to do anything that would increase Web use, because it paid less to serve that use than rivals and so could crush them with its lower costs. Monetization could wait.

 

It's now clear that it can't wait any longer, and investors have cheered the new, more ruthless Google. If you bought Google at the bottom of the 2008 crash, at less than $263/share, you have recorded a gain of about 215%, with the price now topping $825. 


But along the way Google has lost something. It has lost the belief on the part of users that it's different, that it cares more about people than, say, IBM or Microsoft does. It has become an empire, Larry Page is its emperor, and anyone who might question Page's decisions now knows that the price of speaking up is banishment.

 

The best tech companies think different. That's not just an Apple (AAPL) slogan. It's an industry imperative.

 

Doing what everyone else is doing is a recipe for disaster. Google became Google by thinking differently. Now it seems to be thinking like every other company -- about its corporate imperatives, its own success, rather than the growth of its people or its customers.

 

There's no longer anything in any of its products that rivals can't replicate. An Android phone is a "me-too" iPhone. A Chromebook is a slimmed-down PC. Some of its services, like Google Finance, now look second-rate next to Yahoo!. Google Plus is not Facebook (FB). Google seems to be slowly losing its imagination, its joie de vivre, becoming just another company. 
 

You can call that "grown up" if you want. I call it stale. And what's the big deal about being "grown up" anyway? It just means you're getting old.


He's out there 

It's possible I'm just being cranky here. I am one of those reporters who depended upon Google Reader for a quick daily look at sources I trust, and help in identifying new ones. Every blogger I know, who's now making a living from their writing, started with an RSS feed -- an XML file that could be collected, and delivered by a product like Google Reader.

 

Once there were dozens of such readers. But Google's was better, and it was free. The competition was killed. By killing Google Reader, Google is trying to kill RSS, and the route young writers would take to get the attention they need to become great writers.

 

Pulling up the ladder after you've climbed into bed, turning a collection of strong entrepreneurs into a crew of yes men, and becoming a big swinging dictator may make you feel better, but it makes you vulnerable to the first kid who comes along with a clue, the first one to come along who thinks different.

 

He's out there. Maybe she's out there. They're going to kick Larry Page's butt. Just you watch.

 

More from TheStreet.com

6Comments
Mar 24, 2013 3:22PM
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dana:   i agree with u ... i'm waiting for goog on-sale ... just about every analysts is glorifying goog ... its price could be over a thousand or more ... yeah, right ... it's time to park our cash on the sideline ... wait for larry falling from his pedestal ... then we'll move in and go long ... and ... one little advice ... do not go short.
Mar 18, 2013 10:04PM
Mar 21, 2013 10:15PM
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All this ire and spleen and mudslinging just because Google Reader has been shut down? :-o And you call yourself a 'tech journalist' ?
Mar 19, 2013 12:21AM
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Google is still kicking butt... android is engulfing the world...this article is a joke !

Mar 19, 2013 4:42PM
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Google reader? Almost no one cares. I'd venture <<1% of all web users.

Apple's not as inovative as you think. They make really great products that most people can't afford - but they rarely inovate something new. They just somehow end up getting the credit for it.

 

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