Google turns Page on Schmidt, names co-founder CEO (Update)

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 Google announced Thursday that co-founder Larry Page, pictured in 2007, would replace Eric Schmidt as chief executive of the Internet giant in April.

When Google Inc. went public in 2004, the three men running the company promised each other they would remain a ruling triumvirate for at least 20 more years.

Although their commitment to work together until 2024 hasn't changed, Google CEO Eric Schmidt and company co-founders Larry Page and Sergey Brin are being reassigned in an attempt to recapture the free-wheeling spirit of the company's youth.

The surprise shake-up announced late Thursday will return Page, 37, to the CEO job he filled in Google's early days. The move ends Schmidt's decade-long reign in a position that also stamped him as the "adult supervisor" of a company that once seemed like a romper room filled with technological wunderkinds.
Schmidt, 55, will stay on as executive chairman. The new role turns him into Page's consigliere as well as a liaison for Google's business partners and government officials.

Brin, also 37, will be freed up to work on pet projects aimed at expanding Google's empire.
The changes take effect April 4, leaving the current hierarchy intact through the current quarter.

Google can only hope the new pecking order pans out as well as the old chain of command has. The formula turned Google's search engine into a moneymaking machine, with the latest reminder of the company's prosperity coming Thursday with the announcement that it earned $2.5 billion in the fourth quarter - the most for any three-month period in its 12-year history.

Page started out as Google's CEO when he and Brin started the business in a Silicon Valley garage and kept the top job until the venture capitalists backing the company insisted on bringing in a new leader.

That led to the 2001 hiring of Schmidt, a professorial engineer who was previously chief technology officer at Sun Microsystems Inc. and CEO of Novell Inc., both much bigger than Google at the time. After initially resisting Google's overtures, Schmidt bonded with Page and Brin to form a brain trust that proceeded to build the Internet's main gateway and most powerful company.

Google now boasts a market value of more than $200 billion, a success story that has placed Page, Brin and Schmidt among the world's wealthiest people. The three men are Google's largest individual shareholders, stakes that turned them all into multibillionaires.

But as Google has grown into a company with more than 24,000 employees, its decision-making increasingly has bogged down into a bureaucracy. The managerial constipation threatened to put Google at a competitive disadvantage as younger, more nimble Internet services such as Facebook pounce on new trends to lure away users and advertisers. At Facebook, 26-year-old founder and CEO Mark Zuckerberg calls the shots in an entrepreneurial culture that has enticed dozens of engineers to leave Google to work for the social networking company.

"My goal is to run Google at the pace and with the soul and passion of a startup," Page said in a Thursday interview. "I think I will have time to do that given the way we have split up our responsibilities."
Schmidt concurred in the same interview, saying it had started to become clear the company needed to be run more crisply.

"I am not as concerned about the titles as I am winning," Schmidt said. "I am quite certain that this change will result in faster decision making and better value for the shareholders."

Google's stockholders have had little to complain about, not that it would have made a major difference because Schmidt, Page and Brin combined own a controlling stake in the company. Google is coming off a year in which its earnings climbed 30 percent to $8.5 billion and, although its stock price remains below its all-time high reached in 2007, it has more than doubled from its lows during the recession.

Google shares rose $8.23, or 1.3 percent, to $635 in extended trading after Thursday's announcement. In the regular session earlier, the stock fell $4.98, or 0.8 percent, to close at $626.77. The stock peaked at $747 before the recession.

Although Schmidt has publicly acknowledged bickering with Page and Brin through the years, the management reshuffling appears to be amicable. Both Page and Schmidt heaped praise on each other in Thursday's interview and a conference call with analysts, with Schmidt describing Google's co-founders as his "best friends."

"I believe Larry is ready" to be CEO, Schmidt said during the call. "It's time for him to have a shot at running this."

Page hailed Schmidt as a "tremendous leader" whose contributions exceeded all expectations. "There is really no one else in the universe that could have accomplished what Eric has done," Page said.

Enlarge

In this Nov. 15, 2010 file photo, Google CEO Eric Schmidt speaks at the Web 2.0 Summit in San Francisco. Google Inc. co-founder Larry Page is taking over as CEO in an unexpected shake-up that upstaged the Internet search leader's fourth-quarter earnings Thursday, Jan. 20, 2011. Page, 37, is reclaiming the top job from Schmidt, who had been brought in as CEO a decade ago because Google's investors believed the company needed a more mature leader. (AP Photo/Paul Sakuma, File)

Although he tried to debunk the idea in Thursday's interview, Schmidt may have been growing weary of all the attention and prosaic duties that come with running one of world's most scrutinized companies. "I don't think Eric was pushed. I think he jumped," said Ken Auletta, author of "Googled: The End of the World As We Know It." "I think Eric is burned out."

There have been signs Schmidt would prefer doing something else. For the first time last year, he started to sit out of Google's quarterly calls to discuss its earnings. More recently, he has expressed irritation about how some of his public remarks have been picked apart to support the idea that Google is an arrogant company that can't be trusted to protect people's privacy as its search engine and other services collect vast amounts of personal information.

In October, Schmidt drew fire for responding to a hypothetical question posed at a forum in Washington, D.C., about an implant that would let Google know what its users were thinking. He responded that Google's policy is to "get right up to the creepy line and not cross it," and an implant would cross the line.

He also said that as users voluntarily share information online, it doesn't need users to type in search queries for the company to tailor the results. "We don't need you to type at all. We know where you are. We know where you've been. We can more or less know what you're thinking about," he said.

Such comments have been repeated in online musings that portrayed Schmidt and Google as "creepy."
"The biggest thing I wonder is after a year or so of having various gaffes and statements taken out of context if he decided he no longer wanted to play that front-man role," said Danny Sullivan, the editor-in-chief of the SearchEngineLand news site.

Schmidt's role as a government ambassador could be particularly important because the company is increasingly wrangling with regulators and lawmakers as it tries to expand into new markets even as it faces complaints that it has been abusing its dominance of Internet search to thwart competition.

Schmidt, who has been called upon to give economic advice to President Barack Obama before and after he was elected, could be well suited to defuse the concerns in the U.S. He is also expected to play a key role in identifying Google's takeover targets, which makes sense if he is also going to be addressing antitrust concerns.

Google has plenty of ammunition left to finance its ambitions for this year and beyond. It ended December with $35 billion in cash.

The change in command seemed long overdue to longtime Silicon Valley analyst Rob Enderle.
"Whenever you have a caretaker CEO, they're supposed to stay in place until the founders have enough experience," he said. "Larry had enough experience about four years ago."

©2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Blog postings can backfirfe, collide!

Blog postings can backfire

PUTIK LADA By FOONG CHENG LEONG

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Social media influence has hit court proceedings, with lawyers trolling blogs and Wikipedia in search of material that can help them argue the case for their clients.

LAST year brought further interesting development to social media and laws all around the world. Cases making references to social media tools saw an increase.

Social media was a tool for lawyers and litigants to help parties to fight their cases. Social media was also the cause of some parties’ mortification and incarceration.

In one High Court judgment last year, the judge recognised the publication of defamatory blog postings by a husband as one of the grounds to present a divorce petition before the expiry of two years from the date of marriage.

He also recognised that a defamatory statement in a blog posting operated in a borderless realm, and would continue to exist until the maker of the blog removed it.

The challenge against the constitutionality of S. 233 of the Communications and Multimedia Act 1998, the provision commonly used against Internet users, was dismissed by the High Court.

In this case, the defendant was charged with making disparaging remarks against the Sultan of Perak during the struggle between Barisan Nasional and Pakatan Rakyat. The court held, among other things, that the section did not impede freedom of expression. S. 233 is to ensure that the freedom given by the Constitution is exercised responsibly.

The use of Wikipedia as a reference is increasingly recognised in Malaysia, notwithstanding that the reliability of Wikipedia is questionable, as anyone can add or edit an entry in Wikipedia.

Nevertheless, the reliance on Wikipedia by our courts can be traced in reported cases as early as 2007.

Last year Wikipedia was referred to in Etonic Garment Manufacturing Sdn Bhd v Kunn-G Freight System (M) Sdn Bhd [2010] 1 LNS 13 (for the meaning of freight forwarder), PP v Murugan a/l Arumugam [2009] 1 LNS 1759 (for the meaning of atherosclerosis) and Thai Long Distance Telecommunication Co Ltd & Anor v Malaysian Maritime Dredging Corpo­ration Sdn Bhd (Kuala Lumpur Suit No: D-22-352-2005, for the meaning of chart datum).

Social media influence had also hit court room proceedings. It is common in Malaysia for people, in particular reporters, to tweet live from the courts. In the United Kingdom, the Lord Chief Justice issued a guideline for the use of live text-based forms of communication from court.

In this guideline, the Lord Chief Justice approved the use of Twitter for court reporting. However, in the US, certain courts ban the use of social media by juries.

In the US case of Romano v. Steelcase Inc, 2006-2233 (N.Y. Super. Sept. 21, 2010), Kathleen Romano sued Steelcase Inc for injuries she suffered after she fell off an allegedly defective desk chair manufactured by Steelcase Inc.

As a result of the fall, she claimed, she suffered restricted movement of her neck and back and “pain and progressive deterioration with consequential loss of enjoyment of life”.

In defence, Steelcase applied to access Romano’s current and historical Facebook and Myspace pages and accounts which are believed to be inconsistent with her claims in the action concerning the extent and nature of her injuries, especially for loss of enjoyment of life. The court granted Steelcase’s application.

Similarly, in McMillen v Hummingbird Speedway Inc, et al, Court of Common Pleas of Jefferson County, Pennsylvania, Civil Division, No. 113-2010 CD, Opinion on Defendants’ Motion to Compel Discovery (Sept. 9. 2010), the plaintiff sued the defendants for injuries suffered.

The defendants claimed that posts on the public portion of his Facebook page showed that he had exaggerated his injuries. The court granted the defendants access to the plaintiff’s private portion of his Facebook and Myspace account to determine whether or not the plaintiff had made any other comments which impeached and contradicted his disability and damages claims.

Closer to home, in a reported Industrial Court case, an employee claimed that she was forced by her employer to resign.

In response, her employer argued that the resignation was voluntary and they produced extracts of the claimant’s blog which showed the claimant had written about her feelings regarding her employment with the employer.

In it, she stated that she wanted to leave the company and admitted that she went for job interviews as she had already decided to go away.

The Industrial Court chairman relied on the blog entries to find that the employee had intended to leave and found that she had gladly tendered her resignation to take on new employment.

In Australia, a hairdresser won compensation for wrongful dismissal after losing her job for making unflattering remarks about her employer on her Facebook.

In Miss Sally-Anne Fitzgerald v Dianna Smith T/A Escape Hair Design [2010] FWA 7358, Commissioner Michelle Bissett for Fair Work Australia said that posting comments about an employer on a website (Facebook) that can be seen by an uncontrollable number of people is no longer a private matter but a public comment.

It would be foolish of employees to think they may say as they wish on their Facebook page with total immunity.

This year brings another exciting watershed to Malaysia’s social media legal sphere. The Personal Data Protection Act 2010, which governs the processing of personal data, is pending enforcement.

Proposed amendments to the Copyright Act 1987 have been drawn up in the form of a Bill to exempt Internet service providers from liability for copyright infringement under certain circumstances.

The Bill also empowers the court to order an Internet service provider to disable access to infringing material.
Furthermore, the so-called Internet Service Providers Liability Act may be passed to compel Internet service providers to take action against their users if they download songs or movies illegally.

The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my.

When blogs and big business collide

OPTIMISTICALLY CAUTIOUS By ERROL OH

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REMEMBER a blog called Sime Darby Watch (SDW)? It has been completely wiped out when the mysterious blogger he never revealed his identity on the blog abruptly called it quits in April 2009. It's therefore hard to pinpoint when it was created, but early 2008 seems to be a safe bet.

One news report puts it as March 2008. That was not long after the completion of the mega-merger that saw Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd becoming a single entity we now know as Sime Darby Bhd.

It was apparent that the blogger had not come from the old Sime Darby. In fact, he explained that the blog was “for employees of the now-defunct Kumpulan Guthrie and Golden Hope to voice their views and concerns”. The blogger clearly had access to a lot that was going on at the new Sime Darby and was decidedly critical of its management, which was dominated by executives from the old Sime Darby. He often brought to light major developments and issues at the company that had not been publicly available.

SDW was easily the most well-known among the blogs that targeted local businesses. Sime Darby was (and still is) one of Malaysia's biggest companies, and the merger had enlarged it further although not everyone thought the exercise was a good idea. And as a government-linked company, there was (and still is) a political dimension to many of its actions and decisions. These factors guaranteed a ready audience for dirt on Sime Darby.

The blogger's ability to consistently expose alleged wrongdoings and his writing skills in lambasting his target, also helped SDW garner a significant following.

No other anti-corporation blogs have so far come close to SDW's influence. Most have been short-lived, seldom lasting beyond a handful of entries after the bloggers had run out of things to say or have simply exhausted their motivation to blog.

However, another blog has recently surfaced, promising to go on “for months to come to weed out corporate misconducts (sic) as a service to the taxpayers and Malaysians in general”. The blog's title, zarinahtakesapaycut, is a swipe at Securities Commission chairman Tan Sri Zarinah Anwar, but the principal target is actually professional services firm PricewaterhouseCoopers (PwC).

The anonymous blogger has been prolific so far. The blog kicked off on Dec 1 last year with four postings. Until yesterday, there have been 34 more. That's an average of one posting every 36 hours! He has also been persistent (and somewhat pesky), compiling an email list to ensure that all those on the list including this columnist and some colleagues are notified whenever the blog has a new entry.

The blogger definitely knows a thing or two about grabbing attention. The headlines for the blog entries are usually cleverly crafted and compelling. The blogger has been creative and resourceful in generating angles and themes that suggest that the blog is constantly introducing fresh information and highlighting new players and developments. For example, a Dec 31 entry cited a May 2009 article by this columnist to back up the blog's claims about PwC.

The truth is, zarinahtakesapaycut is a relentless attempt to discredit PwC by harping on the same few issues. The bias is obvious. Only the hopelessly clueless will think that the blogger is being objective. Even so, we can't dismiss the blog with the wave of a hand, partly because the blogger is insistent in bombarding readers with details.

This is not the place to dwell on how much of the blog is factual. The point here is that the blogosphere has become part albeit a small one for now of the corporate landscape. However, we have yet to properly understand how we treat the information we get from the blogs. The idea of regulating blogs is an incendiary matter and we may not even have to go there but there ought to be more discussion and engagement within the business community about this subject.

How can we not be ambivalent about these anonymous bloggers who attack listed companies, Big Four firms and business regulators? On one hand, we are thrilled by the pugnacious muckraking and the whiff of scandal, and we cheer the notion of the lone guy, armed with a PC and Internet connection, going up against the deep-pocketed, soulless corporation? Yet, can we really afford to ignore the questions about the bloggers' motives and integrity, and the veracity of the information they put up in cyberspace?

Sure, we can agree that everybody ought to take the content of these blogs with a pinch of salt, but that does nothing to address the lack of fairness and transparency that can occur. Besides, if the bloggers are indeed accurate and have revealed stuff that the companies had intended to hide, our scepticism may well work against us. And what if the bloggers are way off the mark, or worse, are deliberately spreading lies? In such cases, sometimes, no amount of salt can undo the damage suffered by the targets. And when the businesses suffer, their stakeholders (such as the minority shareholders) feel the pain as well.

Yes, legal action is an option, and yes, the mainstream media isn't perfect either. We know this, but what we need to learn next is how to effectively deal with irresponsible blogging. In business, as in politics, one of the worst things that can happen to us is when our ability to choose what to believe in, is weakened by bad information.

● Deputy executive editor Errol Oh doesn't have a blog.