Larry Page and Sergey Brin, who co-founded Google back in 1998 while studying at Stanford University yesterday drew a line under an era with the announcement that both are to step down from their executive roles with parent company Alphabet. Mr Page has been Alphabet’s CEO since the parent company was established four years ago to provide a more organised umbrella company for Google’s growing sprawl of units. Mr Brin has been the company’s president.
The pair are to remain involved as major shareholder, board members and founders. But feel the time is now right to hand the day-to-day running of the company over to a new generation of executives. A blog post in the names of both Page and Brin explained the decision:
“Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost. While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents — offering advice and love, but not daily nagging!”
The decision to step back after 20 years leading the company, the post went onto explain, comes from a belief that the time is right for a simplification of the management structure of both Google and Alphabet:
“We’ve never been ones to hold on to management roles when we think there’s a better way to run the company. And Alphabet and Google no longer need two chief executives and a president.”
Sundar Pichai, the 47-year-old who has held the role of Google’s CEO for the four years since Mr Page stepped up to the position at Alphabet, will take on the dual role of heading the executive boards of both companies. Alphabet will not replace Mr Brin as president, retiring the role for the foreseeable future.
Google is still by far the largest company under the Alphabet umbrella and earns the lion’s share of its revenues from online advertising income. Google Maps, Gmail, Google Drive, Chrome web browser, the Google Cloud Platform, Android mobile OS and the YouTube video sharing platform are all still part of Google. The company’s ‘Other Bets’, including the Waymo driverless vehicle technology, and life sciences unity Verily were separated out from Google with the formation of Alphabet as a parent holding.
Alphabet is currently the world’s fourth largest public company by market capitalisation. Its $877 billion value places it behind only Microsoft, Apple and Amazon. Alphabet’s share price yesterday gained just under 0.5% on the announcement of the company’s management changes.
The two co-founders will retain a controlling share of Alphabet’s voting rights as well as their places on the company’s board. Mr Page holds 5.8% of Google’s shares and Mr Brin 5.6%. New CEO Mr Pichai owns 0.1% of the company. The pair say that despite no longer holding executive roles they will remain actively involved in offering advice and guidance and would speak with Mr Pichai “regularly”.
Arguably the biggest challenge facing Alphabet over coming years is the anti-trust scrutiny action increasingly being taken against Google by competition regulators in Europe and the USA, who are worried about the company’s dominant market position. Mr Pichai will be hoping to avoid any further in-house scandals such as that surrounding Android founder Andy Rubin who walked away last year with a $90 million ‘golden goodbye’ despite sexual harassment allegations. The move provoked an employee walk out last year as the company’s rank and file staff protested.
But Alphabet, and Google, also have several exciting irons in the fire that could see the company continue to grow. Waymo is well positioned to usher in the new driverless technology era as a market leader and the Google Cloud Platform continues to grow at pace along with the world’s rapidly increasing computing and data storage services.