The Education of Google’s Larry Page – Businessweek

Larry Page is surrounded. On one side, Google’s (GOOG) chief executive officer confronts Facebook, the social networking phenom that is about to go public. On his other side is Apple (AAPL), which has moved the playing field off the desktop computer—Google’s fiefdom—and onto smartphones and tablets. Thus Page, who became CEO of Google a year ago, has the task of steering the company he co-founded through territory defined by two rivals while fending off accusations that his brainchild has become yet another lumbering monopolist or, worse, a follower.

Sitting for an April 3 interview at the Googleplex in Mountain View, Calif., Page bridles at any suggestion that Google isn’t the destiny-defining innovator it once was. He’s wearing geek business casual—fleece jacket, logo shirt, jeans, black Converse sneakers. “Producing the best [products] we possibly can for users is our paramount thing,” he says. “I think we have demonstrated that over a very long period of time, with a whole variety of different issues we’ve faced around the world.”

Page isn’t the first founder to reassert himself as leader of the company he helped to create. There was Howard Schultz’s return to run Starbucks (SBUX), which has worked out well, and Michael Dell’s reclaiming the reins of his eponymous PC maker, which has not. For a still-young tech entrepreneur such as Page, Steve Jobs’s triumphant homecoming at Apple in 1997 is the most obvious benchmark of success. Their situations aren’t totally analogous—unlike Jobs, Page never left the company he founded. Though the comparison is apt in one important way: In the 1990s, Apple needed a more sophisticated operating system to navigate changes in the computing landscape, and so bought Jobs’s company, NeXT. Today, Google also needs to figure out a new world, in which its users increasingly see the Web through the lens of their friends, instead of a cold, calculating algorithm. Although Google started social networks such as Orkut in the last decade, Page acknowledges that the company underestimated the power of friending. “Our mission was organizing the world’s information and making it universally accessible and useful,” he says. “I think we probably missed more of the people part of that than we should have.”

Google’s tardy embrace of social networking and its other moves, such as the strict terms it dictates to licensees of its Android operating system, have opened the company up to the kind of criticism it rarely encountered during its days as a mere colossus-in-the-making. Antitrust authorities in the U.S. and Europe are investigating whether Google gives preference to its own content in Internet search results instead of being a neutral arbiter. Privacy watchdog groups are calling Google out on changes to its privacy policies, charging that it has abused its users’ trust. Bloggers now routinely wonder if the company is doing evil, a caustic play on Google’s famous dictum in its 2004 initial public offering prospectus. A recent headline on the technology site Gizmodo hyperbolically summed up the stew of distrust: “Google’s Broken Promise: The End of ‘Don’t Be Evil.’”

Page smiles at the charge. Google, he insists, has not really changed at all. “Our soul is the same,” he says. “What we’re about is using large-scale technology advancements to help people, to make people’s lives better, to make community better. If you look at the river of things we’re doing, like automated cars and things like that, those things are fundamentally about [using technology] to help people. And I think there is still a huge amount of that to be done.”

With Sergey Brin, Page founded Google in 1998 at the age of 25. By any measure, the company is among the most remarkable in the history of Silicon Valley, growing from a research project at Stanford to a multibillion-dollar global behemoth in a little more than a decade. Yet by the time Page took command last April, Google had grown unfocused and unwieldy. A freewheeling atmosphere of invention and curiosity spawned countless unpolished, unsuccessful products. (Take Google Buzz. No, really, take it!) The previous CEO, Eric Schmidt, was spending much of his time on the road, focusing on the company’s mounting problems with antitrust and privacy regulators and dousing controversies such as the interception of home networking data by Google’s roving, camera-equipped Street View cars.

An ongoing discussion among Google’s leaders about refocusing the company around key product lines precipitated Schmidt’s decision to step aside. Now Google’s executive chairman, Schmidt is still the public face of the company at industry conferences and government hearings. Brin, Page’s co-founder, works on futuristic technology products, such as augmented-reality glasses. As CEO, Page handles the day-to-day decisions—and takes the blame when things go wrong. “He’s probably working harder than anyone at Google right now,” says Sundar Pichai, senior vice president of the group that makes the Chrome browser.

Page spent the months before his formal appointment as CEO reshaping the leadership team. “He had a very clear sense of the organization he wanted to have and handpicked people to run large areas of the company and set their objectives,” says Ram Shriram, a longtime Google board member. Newly elevated deputies included Pichai, Vic Gundotra of Google+, Salar Kamangar of YouTube, and Susan Wojcicki, who runs the ad unit.

Page also wanted to speed up decision-making at the company, whose ranks had swelled to almost 30,000 employees. He plucked one management idea from New York City Mayor Mike Bloomberg, who requires that the city’s department heads spend time sitting together in City Hall (Bloomberg is founder of Bloomberg LP, which owns this magazine). Page fashioned an open bullpen of desks on the fourth floor of Building 1900 in the Googleplex and required top managers, called the L-Team, to spend part of each day there. “The insight I got from Mayor Bloomberg was that it’s maybe more efficient to tell people, ‘For these hours of the day we’re going to be all together, and at these hours of the day, you’re going to be with your team,’” he says. “I’m just trying to get people together for a fixed set of hours in one place.”

Page also started cutting back on products that weren’t working. Services such as Knol, the Wikipedia knockoff, and the complicated productivity tool Google Wave were sent to the Google graveyard. The company reorganized into seven divisions: search, ads, YouTube, Android, Chrome, commerce, and social networking. Page worked on defining clear short- and long-term goals for the leaders of each group. “In some ways we have run the company as to let 1,000 flowers bloom, but once they do bloom you want to put together a coherent bouquet,” Brin said at a technology conference last fall.

In June, Google unveiled the work of the seventh product group—Google+. Page demanded that every employee embrace the new focus on social networking, and linked yearend bonuses to the overall success of the effort. He says he’s pleased with the service’s progress. “We’re not even a year into that, and that’s going very well; much better than I expected in many, many ways, and I think than most people would have expected,” he says. “It doesn’t mean tomorrow it’s going to be bigger than any other social network out there. That’s not realistic. But it’s growing faster, I think, than other services have.”

Many Google watchers, and more than a few shareholders and analysts, question the extent of that success. Google+ has attracted 100 million members, who spent an average of 3.3 minutes on the service in January, according to ComScore (SCOR). Facebook’s 850 million users spend an average of 7.5 hours a month on that site. Page cites his own Google+ follower count of 2 million users as evidence that people are engaging with the service. And he promises the social network is just getting started with new features.

Page also judges Google+ success in another way, arguing that it has added a necessary dimension to Google search results. He cites the dilemma of a friend, a Google engineer named Ben Smith. It’s such a common name that a Google search returns millions of results. Now that the company knows that Page and a particular Ben Smith are connected, the results are more specific. A common name “is good if you want to have privacy, and it’s bad if you want to have other friends find you,” Page says. “For the first time, we can put Ben Smith into the search box, and it can be the Ben Smith that you know.”

Linking data from Google+ into its search engine, however, has also invited scrutiny. The integration, named “Search, Plus Your World,” was rolled out in January to a chorus of protest from bloggers, privacy groups, and competitors who charged that Google was giving special treatment to its own content. Bloomberg News has reported that the Federal Trade Commission is reviewing Google+ as part of a larger antitrust investigation into whether Google is unfairly abusing its monopoly in search. Regulators in Europe and the U.S. are also looking into accompanying changes in Google’s privacy policy that allow the company to track consumers’ use of various Google services.

Page sounds more than a little exasperated by the doubters. He says he’d be happy to include social data from Facebook and Twitter inside Google results but can’t because those companies will not agree to make it available. “We would love to have better access to data that’s out there. We find it frustrating that we don’t,” he says. As an example, he points to ongoing friction over the one-way transferability of users’ address books between Gmail and Facebook. New members of Facebook can quickly and easily find their Gmail contacts, but it doesn’t work the other way: New Gmail users cannot similarly find their Facebook friends. “Our friends at Facebook have imported many, many, many Gmail addresses and exported zero addresses out,” he says. “They claim that users don’t own that data, which is a total specious claim. It’s completely unreasonable.”

As for the parts of their sites that rivals do make available to Google’s search engine, such as individual tweets or profile pages on Facebook—Page dismisses the idea that Google should do a better job of getting those to show up in its search results. “We don’t force anyone to index,” he says. “That’s not the way we operate. … That’s always somebody else’s choice, whether their data is indexed or not.”

Last July, Google lost an important battle that was mostly invisible to the public. It bid for the patent portfolio of bankrupt Canadian telecom pioneer Nortel and was outspent by a consortium of rivals that included Microsoft (MSFT), Sony (SNE), Research In Motion (RIMM), and Apple. Suddenly, Android, the open-source mobile operating system that powers about 50 percent of the world’s smartphones, seemed vulnerable to the wave of licensing shakedowns and patent lawsuits breaking out in the high-tech industry. The next month, Google paid an astonishing $12.5 billion for Motorola Mobility (MMI), the American technology company with its own trove of mobile patents dating back to the invention of the cell phone. “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Page wrote in a blog post announcing the deal.

Page laments the tendency among technology companies to sue each other over intellectual property. “The general trend of the industry towards being a lot more litigious somehow has been a sad thing,” he says. “There is a lot of money going to lawyers and things, instead of building great products.” Google, he insists, has never aggressively enforced its own patents in search, and he blasts the aggressors engaging in warfare in the mobile arena. “I think that companies usually get into that when they’re towards the end of their life cycle or they don’t have good confidence in their abilities to really compete naturally.”

Although Google’s acquisition of Motorola was approved by regulators in the U.S. and Europe, it remains under review by Chinese antitrust officials and the deal has yet to close. Dennis Woodside, a longtime Google executive, will head the new Motorola division inside Google, Bloomberg News has reported. Page won’t elaborate on his plans for Motorola Mobility, though it’s hard to imagine he wouldn’t introduce Google-branded phones and tablets to help the company compete with the runaway success of Apple’s elegant hardware. Existing Android tablets “are great experiences,” Page insists, “but they are going to get a lot better. I think we’re at the pretty early stages of this.”

At the end of the conversation, Page addresses one anecdote relayed in Walter Isaacson’s best-selling biography of Steve Jobs. According to a story in that book, Page called Jobs before his death, seeking advice on how to run Google. Jobs had threatened “thermonuclear war” on Google for copying elements of the iPhone, Isaacson wrote, but put aside his animosity over Android to counsel the young CEO.

Page offers a different version of those events. He says that Jobs reached out to him, not the other way around, and that when they met, in the last months of Jobs’s life, the Apple founder offered useful insights into how to run a company. Page believes that Jobs’s fury toward Google was not entirely genuine and was “actually for show.” Asked to explain, he suggests that Jobs’s apparent rage about Android was merely meant to motivate Apple employees. “For a lot of companies, it’s useful for them to really feel like they have an obvious competitor and to rally around that. I personally believe it’s better to shoot higher. You don’t want to be looking at your competitors.”

That could be a classic Silicon Valley-style distortion of reality. The man who pioneered the practice and would know for sure is gone. It’s now Larry Page’s world, and he’ll have to work even harder than he already does to keep it that way.

The Education of Google’s Larry Page – Businessweek.

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