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Stephen Logan

Google’s Growth Overshadowed by Management Reshuffle

21st Jan 2011 News, Industry News 2 minutes to read

Yesterday Google announced huge revenue growth for the fourth quarter in 2010, but it’s the change of CEO that’s hitting all the headlines.

You know a story must be big when it dwarfs Google’s $8.44 billion in revenue for Q4 of 2010, but nonetheless these impressive figures should be looked at. TechCrunch have revealed the highlights, with Google properties boasting a 17% increase over the $7.2 billion earned in Q3 and a staggering 26% increase over the $6.67 billion earned in Q4 of 2009.

Now revenue is vanity and profit is sanity, so how did Google’s profits do? Well, they weren’t bad either, just the $2.54 billion compared to $1.97 in Q4 of 2009; that’s a 29% increase from last year. Looking at the UK figures, revenues totalled $878 million. This equates to 10% of total worldwide revenues, down 2% from the 12% of worldwide revenues in Q4 of 2009. This suggests that other worldwide markets are catching up with the UK market.

These revenue trends seem to be a similar story for Google, every three months we see quarter on quarter and year on year increases. Yet this time, things were different as they announced something totally unexpected, something that has taken the limelight instead of these staggering figures.

Yesterday Google also announced on their official blog that their CEO, Eric Schmidt will be stepping down on 4th April, letting co-founder Larry Page take over as CEO. It’s a total management shuffle that will see Schmidt take on the new role of Executive Chairman, whilst other co-founder Sergey Brin ‘devote his time and energy to strategic projects’.

Now, clearly this had been planned for a while, seeing as Schmidt revealed, ‘Sergey and I have been talking for a long time about how to best 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.’ Talk about choosing a good day to bury bad news, the problem is that people are talking more about the management reshuffle than the impressive revenue figures.

So, everyone seems to be having their two cents on the situation, trying to work out or ‘search’ (pardon the pun) for some sort of meaning behind Google’s reshuffle. Well, a lot of focus is on where Schmidt says, “speed up decision making”, because it is widely believed that co-founders Larry Page and Sergey Brin have been driving all of the major strategic decisions whilst vetoing any of Schmidt’s decision in the process.

So, the result of the shake-up could mean that there is tighter control at the top. But whilst Schmidt assures users that the future of Google “is bright”, and let’s be fair they seem to be doing pretty well, there’s still a degree of uncertainty concerning the return Larry Page as CEO. It’s served mixed fortunes in the past, for example Steve Jobs’ return to Apple compared to Jerry Yang’s return to Yahoo. With Page, Brin and Schmidt (the ‘triumvirate’ as Schmidt calls them) still making the ‘big decisions’, it will be hard to see much of a change, but only time will tell.

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