Eric Schmidt to step down as CEO – Google reports US$8.4bn revenues

20 Jan 2011

Eric Schmidt is to hand the role of CEO of Google over to the company’s co-founder Larry Page in April. Google reported a 26pc rise in Q4 revenues of US$8.44bn.

Google, which is adding 200 jobs to the existing 1,600-strong workforce in Dublin, reported operating income in the fourth quarter of 2010 was US$2.98bn, or 35pc of revenues.

For the quarter, the company posted a net profit of US$2.94bn, up from US$1.97bn a year ago. The results yielded earnings per share of US$7.81.

Google-owned sites generated revenues of US$5.67bn, or 67pc, while revenues from outside of the United States totalled US$4.38bn, representing 52pc of total revenues.

“Q4 marked a terrific end to a stellar year,” said Schmidt. “Our strong performance has been driven by a rapidly growing digital economy, continuous product innovation that benefits both users and advertisers, and by the extraordinary momentum of our newer businesses, such as display and mobile. These results give us the optimism and confidence to invest heavily in future growth – investments that will benefit our users, Google and the wider web.”

Google changes its management structure

While Schmidt will step down as CEO he will assume the role of executive chairman, focusing on deals, partnerships and broader business relationships, as well as advising Page and co-founder Sergey Brin.

“We’ve been talking about how best to simplify our management structure and speed up decision making for a long time,” Schmidt said.

“By clarifying our individual roles we’ll create clearer responsibility and accountability at the top of the company. In my clear opinion, Larry is ready to lead and I’m excited about working with both him and Sergey for a long time to come.”

Commenting on the changes and Schmidt’s contribution to Google’s stellar development since Schmidt joined the company in 2001, Page said: “Eric has clearly done an outstanding job leading Google for the last decade. The results speak for themselves.

“There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly. Eric is a tremendous leader and I have learned innumerable lessons from him. His advice and efforts will be invaluable to me as I start in this new role. Google still has such incredible opportunity – we are only at the beginning and I can’t wait to get started,” Page added.

‘Search has changed people’s lives’ – Schmidt

In a blog post following the release of the results, Schmidt wrote: “When I joined Google in 2001 I never imagined – even in my wildest dreams – that we would get as far, as fast as we have today. Search has quite literally changed people’s lives – increasing the collective sum of the world’s knowledge and revolutionising advertising in the process. And our emerging businesses – display, Android, YouTube and Chrome – are on fire. Of course, like any successful organisation, we’ve had our fair share of good luck, but the entire team – now over 24,000 Googlers globally – deserves most of the credit.

“And as our results today show, the outlook is bright. But as Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making – and over the holidays we decided now was the right moment to make some changes to the way we are structured.

“For the last 10 years, we have all been equally involved in making decisions. This triumvirate approach has real benefits in terms of shared wisdom, and we will continue to discuss the big decisions among the three of us. But we have also agreed to clarify our individual roles so there’s clear responsibility and accountability at the top of the company.”

Schmidt said Page will head up product development and technology strategy, “his greatest strengths”, and will take over day-to-day operations as CEO on 4 April.

“In this new role, I know he will merge Google’s technology and business vision brilliantly. I am enormously proud of my last decade as CEO, and I am certain that the next 10 years under Larry will be even better! Larry, in my clear opinion, is ready to lead.

“Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be co-founder. He’s an innovator and entrepreneur to the core, and this role suits him perfectly.

“As executive chairman, I will focus wherever I can add the greatest value: externally, on the deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership that are increasingly important given Google’s global reach; and internally as an adviser to Larry and Sergey,” Schmidt said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years