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, and Facebook."
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 said.