Why Larry Page Created Alphabet
Larry Page is the prototypical inscrutable CEO. In a rare interview Monday at the Fortune Global Forum, Page didn’t say much about much. He is an engineer who speaks like one, and he’s also a clever guy who knows how to keep his considerable cards close to his vest.
Page did make one offhand comment that resonated with me, especially the more I think about it. Asked how he thought about Google’s plans in China, he said, “I’ve delegated this question to Sundar. I help him think about it so I don’t have to answer this question.” He was referring to Sundar Pichai, the veteran product executive Page made CEO of Google when he created the holding company Alphabet and made himself CEO of the new entity. (Not for nothing, Page chuckled and grinned widely after saying this. Watch the full interview here.)
That comment did more than anything previously to help me understand the point of Alphabet. This is now the second time Page has handed off day-to-day responsibility for the core Google business. The first time he dished it to Eric Schmidt, in order to get a more seasoned hand in charge. By now a seasoned executive himself, this time Page handed off Google so he could focus on big thoughts and leave the operational details to someone else.
It makes perfect sense. I highly doubt Page suddenly has become lazy. Still, does he want to spend hours and days diving into the nitty-gritty of how Google can bring its ad-search business to China? Maybe yes, maybe no. Regardless, it is Pichai’s responsibility to do so, and Page can dart in and out as warranted?—?and as he chooses.
It’s not as if Page is the only CEO to outsource such important tasks. In an interview at the conference on Tuesday, Comcast CEO Brian Roberts told me he uses the same structure. Veteran media executive Steve Burke runs NBCUniversal, and Neil Smit, a seasoned cable hand, oversees Comcast’s cable business. Roberts says his chief task is to think about Comcast’s culture. That’s undoubtedly a gross understatement, but it’s no joke that Burke and Smit are responsible for their domains at Comcast.
It is cliché to say the CEO job is too big for one person. Cliché, perhaps, but also sometimes true, as Page, Roberts, and other clear-thinking chief executives can attest.
This article first appeared in the daily Fortune newsletter Data Sheet. Subscribe here for a daily dose of analysis from Adam Lashinsky and a curation of the day’s technology news from Heather Clancy.
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9 年V
AR is the UI for AI.
9 年They created Alphabet because Google get 95%+ profits from "desktop" search, 65% of what little mobile revenue they have comes from iOS, and Apple controls 92% of all global smartphone profits (proving that marketshare doesn't matter). The Google search monopoly is the goose that laid the golden egg. As mobile takes over, Google is losing out, big time. Android has a stranglehold on the bottom of the market where HTC makes 1.2￠ margin per Android phone sold, and Apple makes $720 margin for every iPhone 6+ sold. Sundar's job is to focus on maximizing revenue from their search monopoly as it heads into its twilight years, so that Page can take the profits and play VC with them, placing bets and making acquisitions to find the revenue stream that will eventually replace their dying cash cow, as desktop search dies out, and mobile search is replaced by smart assistants. In this scenario, Alphabet is actually a very shrewd strategy and doing so early enough, Page just might be able to place enough diversified bets to find the revenue to replace Google desktop search. He's a smart guy. But make no mistake, this is a defensive maneuver of a company in serious danger.
wealth is near of god
9 年How ever the name of CEO is a part