Aging Google aims to regain coolness

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SAN FRANCISCO --- Google is richer than ever, but it's not as cool as it once was.

Larry Page: Co-founder of Google, now 37, will reclaim the CEO job he last held a decade ago.   Associated Press
Associated Press
Larry Page: Co-founder of Google, now 37, will reclaim the CEO job he last held a decade ago.

Facebook boasts 500 million members who share 30 billion links, notes and photos each month -- data that Google's search engine can't completely index. It's so influential that 26-year-old founder Mark Zuckerberg was just named Time's person of the year, and a movie about the company's early days is a contender for best picture at the Oscars.

Twitter, Groupon and Foursquare, all hard-charging and potentially game-changing services, are additional thorns in Google's side, raising worries that the online search leader might be losing the competitive edge that turned it into the Internet's most powerful company.

Making Google hip and nimble again will be the priority as Larry Page, one of the two Stanford University students who founded the company in a garage in 1998, prepares to reclaim the CEO job in a shake-up that surprised Silicon Valley.

He last held the job a decade ago, when Google Inc. had less than $100 million in annual revenue and fewer than 300 employees. Google's size today -- 24,400 employees and annual revenue of $29 billion -- has slowed its decision-making and innovation.

About 200 of Facebook's 2,000 employees defected from Google, and the migration appears to be about more than just the allure of getting stock options in a hot company before it goes public. Some engineers seem to be drawn by the work at a smaller company, which offers an opportunity to reshape culture with less corporate bureaucracy and more creative freedom.

"Facebook has become the cool kid on the block, and now Google wants to prove it can still be cool, too," said Danny Sullivan, who follows both companies closely as editor in chief of Search Engine Land.

It's not an impossible feat, said Michael Cusumano, an MIT professor of management. He cites IBM, which seemed on its way to becoming a tech dinosaur in the early 1990s before Louis Gerstner arrived as CEO and streamlined the company.

To get back to its roots, Google concluded it needed to rearrange the hierarchy in place since technology veteran Eric Schmidt was brought in as CEO in 2001. It was an egalitarian arrangement, with Schmidt never having the final say on important matters. Page and Google's other founder, Sergey Brin, always weighed in, too. In some cases, such as Google's decision to move its search engine out of mainland China last year, the founders overruled Schmidt's wishes.

In April, Schmidt will become executive chairman and relinquish the CEO duties to Page, now 37 and graying. While Schmidt travels the world meeting with business partners, government officials and potential takeover targets, Page says, he will be making most of the big decisions as he tries to rekindle "the soul and passion of a startup." Brin will concentrate on developing new products.

He's worth $15 billion, but Page remains something of a rebel who has always had a disdain for corporate protocol.

"Larry and Sergey both hate being organized. They don't want to be locked into meetings," said Ken Auletta, who got to know both while writing his book, Googled: The End of the World as We Know It .

Though a free-wheeling attitude typically works well at small companies, it could cause problems in a company as large as Google, said Steve Booth, a business professor at the University of Chicago.

"The risk is that if you take away the process, that in some sense you go back to a kind of chaos," Kaplan said.

Schmidt, 55, has no doubt Page is ready for the challenges ahead.

"Larry has been with me in every major decision in the past decade," Schmidt said Thursday. "It's not like he has been sitting around doing nothing."

More offers

Google, which has expanded beyond its core search operations into mobile phones and other products, is developing a local coupon service similar to Groupon.

Like Groupon Inc., Google Offers will provide time-limited deals from local vendors. Ten dollars, for example, might buy $20 worth of food at a local cafe.

Google would not say when Offers would be available or provide any more details about its plans.

Last month, Google reportedly tried to buy Groupon for somewhere between $5 billion and $6 billion, but was rejected. Groupon has since raised an additional $950 million in venture capital funding.

-- Associated Press

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