Analysts reacted differently to Google CEO Eric Schmidt's pledge to vacate his role this April, leaving Google co-founder Larry Page in his place.
Google CEO Eric Schmidt's announcement
that he is relinquishing his title to company co-founder Larry Page has
hijacked the news cycle throughout the tech industry in the last two days.
Schmidt made the news
on Google's fourth-quarter earnings call Jan. 20.
The news was a bombshell for analysts expecting Google to announce a solid
quarter of search ad revenues.
With $6.37 billion in revenue beating Wall Street's expectations of $6.04
billion, analysts certainly
got what they expected.
It's the extra jolt they were unsure about: Schmidt's ceding of his CEO
role to Page April 4 and assuming the role of executive chairman, where he will
be responsible for brokering deals and other duties.
Google's stock fluctuated greatly after the news, but it ultimately closed
down nearly $15 to $611.83 Jan 21.
RBC Capital Markets analyst Ross Sandler
said he doesn't believe the changes will materially change the day-to-day
operations for Google and said they should have minimal impact on Google's
ability to execute.
Piper Jaffray analyst Gene Munster, who said investors were unsure how to
react to the news, wrote in a Jan. 21 research note:
"We believe the bottom line on the news is that Schmidt will continue
to be actively involved in the company and that the transition will likely go
smoothly. We view Page as more of a visionary than Schmidt, while Schmidt had
more of an operational focus. We don't expect the change to negatively impact
operations in any way, but note that it could slightly help inspire the company
creatively in the face of more significant competition from Apple, Microsoft,
Technology analysts took more sanguine views. Enderle Group analyst Rob
Enderle, a longtime critic of Schmidt, told eWEEK he has viewed Schmidt as a
liability at Google over the last few years and "largely failed to do what
he was there to do, and that is prevent obvious mistakes."
Enderle believes Schmidt botched Google's handling of censorship troubles with China
and was critical of comments
Schmidt made about user privacy. Schmidt once claimed that if you who don't
want others to know what you are doing, then you shouldn't be doing it.
"I think it became clear that for a company whose primary customer was
the consumer, whose primary source of income is advertising, and that sells
something they don't own, a low-performing (Novell was hardly a star)
enterprise CEO was a bad fit," Enderle