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    Jobs, Schmidt Role Changes Leave Questions at Apple, Google

    Written by

    Clint Boulton
    Published September 6, 2011
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      Only in Silicon Valley, which teems with technology talent, can the loss of CEOs from the region’s two most powerful companies be weathered so well.

      That is exactly what happened this year with the shuttling of former Google CEO Eric Schmidt to the executive chairman role in April and the shocking, yet ultimately expected resignation of former Apple CEO Steve Jobs from the company he helped build and restore to unimaginable glory.

      The world knew Schmidt was transitioning in January, when the company said on its fourth quarter earnings call that Larry Page would take over as CEO.

      Schmidt, who accepted the torch from Page back in 2002, did preside over major acquisitions such as YouTube and DoubleClick. He helped propel Google to $30 billion a year in revenues. He also politicked enough to keep Capitol Hill off of Google’s broad shoulders.

      Is there a correlation between Page’s turn at the helm and the antitrust Federal Trade Commission’s antitrust investigation into the company? Who can say for sure?

      Page tore into the role in early April, streamlining management and annoying financial analysts by saying little on the company’s first quarter earnings call April 14.

      Page redeemed himself with Wall Street by chatting more on the Q2 call in July. He also scored points by cutting several Google products that were languishing, including Google Health, PowerMeter, Google Labs, Slide and several more Web services. That’s money and sources spent elsewhere to keep the Google money machine running; the company has nearly $40 billion in the bank.

      But Page’s return to power may be more notable for what Google did to fortify its position. Google launched its Google+ social network and made a bold bid for Android OEM Motorola Mobility (NYSE:MMI). There is no guarantee federal regulators will bless that bid, but Page gets points for moving fast and aggressively to shore up Android’s patent portfolio poorness.

      Perhaps in later years, Wired’s Steven Levy, The New Yorker’s Ken Auletta, or some other author of a renowned book on Google will pen a follow-up divulging the ins and outs of Schmidt’s migration to executive chairman.

      For now, pundits are left to surmise, based on Schmidt’s own comments and Google’s delivery of Google+, that Schmidt was shunted aside for failing to move the needle for Google in social versus Facebook.

      Jobs Nearly Perfect in Execution at Top

      This sort of personal failing in business would never be brooked by Schmidt’s friend Jobs, who left under marketedly different terms.

      Jobs, whose battle with pancreatic cancer led to a liver transplant, stepped down Aug. 24, proclaiming that he was unable to perform the duties of CEO. Jobs remains at Apple in an advisory role, though industry reports claim he has scarcely been seen on campus in Cupertino, Calif.

      What Jobs left Apple with is beyond reproach — $76 billion in the bank, over 100 million iPhones sold, 30 million iPads sold, and the specter of an Apple Television set titilating pundits.

      Jobs’ biggest mistake since his return to Apple in 1997 had to do with his knowledge of backdated stock options nearly 5 years ago, not management or market missteps.

      In any event, these two key CEO departures leave us with a couple of key questions for 2011 and beyond.

      With his iconic status, is Jobs that much better of a CEO than Schmidt, who arguably guided Google through some remarkable launches? Can we expect continued excellence at both Google and Apple for the near future?

      Michael Gartenberg, who covers the wireless sector as an analyst for Gartner, deftly maneuvered around the questions.

      “As Apple and Google are very different companies, so are Mr. Schmidt and Mr. Jobs and the relationship they had with their respective enterprises,” Gartenberg told eWEEK. “I see no reason why we won’t see business as usual with both.”

      Enderle Group analyst Rob Enderle, who consults for chief Google rival Microsoft, has never been shy about professing his dislike for Schmidt as Google’s chief:

      “Schmidt was a baby sitter CEO and really not all that good. Reminded me too much of Netscape’s [Jim Barksdale in that he was a bad skills match for a firm whose core business was marketing, not packaged products to the enterprise market (Schmidt’s expertise).”

      Will Google and Apple Excellence Continue?

      He also disagrees that Google, which is still the runaway leader in search, and whose Android platform is the leader in mobile smartphone market share, and has been padding its revenues every quarter, is in solid position.

      “Android is buried in litigation still, they just torpedoed their licensing model by buying Motorola, and just shuttered a recent $200M acquisition (Slide),” Enderle said. “

      That’s not to say Enderle is gung-ho about Apple’s prospects; he is decidedly less confident in Apple’s future without Jobs leading the way. He believes that while Jobs never strayed far from Cook, this new situation may set up a scenario that is, with no dearth of irony, similar to the one Microsoft found itself after Founder Bill Gates gave the CEO role to Steve Ballmer in 2000.

      “Once Ballmer took over day to day and Bill really stepped out last decade you saw the emergence of Ballmer’s Microsoft and you realized what was missing was the focus on product detail and a loss of vision. Cook and Jobs were a team each making up for the weaknesses of the other. Jobs was the face, the captain, Cook the chief mechanic. Scotty, if you will to Jobs’ Captain Kirk. It took both.”

      Enderle said the mere belief that Apple isn’t strong enough without Jobs, whose management style is as aggressive as Cook’s is calm, could make the company vulnerable to competition.

      “When you talk to the leaders of firms that compete with Apple it was Jobs, not Cook, that they feared,” Enderle said. “He was the general they didn’t want to go all out on because they felt he was unbeatable. With him gone Apple looks beatable and there is a drive in CEOs to be at the top.”

      “That is the bigger exposure for Apple. The same thing happened to Microsoft when they lost the DOJ case and Gates clearly started leaving, suddenly the unbeatable company looked beatable and it got beat. Ironically, Apple was the leading company that beat them. “

      Who is the company that can beat Apple? Is it Google under Page? Amazon, with its forthcoming Kindle Tablet and aggressive content distribution, or some entity we haven’t considered?

      How about Google? Will Apple sue Android, and therefore the search engine’s seething mobile ad business to a halt? And will Amazon emerge to eat Google’s lunch in digital content?

      These questions remain open an unanswered in that rarefied air of Silicon Valley.

      Clint Boulton
      Clint Boulton

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