Google CEO Page Shuffles Top Management Structure

By Tracey E. Schelmetic April 11, 2011

Now that the “adult supervision” is over (when former CEO of 10 years Eric Schmidt recently announced he was leaving the company in the hands of one of its co-founders, Larry Page, he Tweeted the comment, “day to day adult supervision no longer needed!”), it would seem that Page has decided to begin stretching his management wings. The newly minted CEO has streamlined decision-making in six key product groups, including social networking and mobile, as the Internet search giant revs up efforts to compete with Facebook and Apple Inc., reported Reuters. Page began his tenure as Google CEO a week ago.

In the reorganization, Page has placed executives leading those six product groups directly under his supervision, eliminating management layers thought to slow product development, according to sources familiar with the situation.

Social networking chief Vic Gundotra, Android head Andy Rubin, Chrome senior vice president Sundar Pichai and Youtube head honcho Salar Kamangar have been given a direct reporting line to Page and greater autonomy, reported Reuters. Also given a direct line to Page were search senior vice president Alan Eustace and advertising chief Susan Wojcicki, the sources said.

Analysts believe the shuffling sends telling signals about the company's strategic priorities at a time when mobile gadgets and social media services redefine the way people use the Internet.

“The folks that you're seeing, which as part of the reorg have kind of come to the top, are sort of the core areas of the business that the company is focused on,” said an unnamed source.

For those groups, the source said, the idea is to have less of a “horizontal” management structure, in which decisions need to be approved across various departments.

Social networking, an area where Google has “struggled to find the right touch,” will have a much higher profile within the company.

“At least social is at the same table with Android and search and ads,” said Stifel Nicolaus analyst Jordan Rohan. “Social is now a big part of the discussion.”

Google is the world's No. 1 search engine and generated roughly $29 billion in revenue in 2010. But the company's position as the main gateway to online information is threatened by Facebook, whose 500 million members regularly use the service to chat about everything from music and movies to world events.

Google has had greater success in mobile with its Android smartphone software. In the three months ending in February, Android became the most popular smartphone software in the U.S., ahead of both Apple and Research in Motion, according to a recent survey by research firm comScore.

A Google spokesman confirmed that there had been a management reorganization at the company, but declined to provide details. The spokesman noted that it had been very clear when the CEO change was announced in January that Page was looking to streamline the way the company is run and to make clear lines of accountability.

Investors had predicted bold and aggressive moves by Page to whittle down red tape at Google, and a renewed focus on search, mobile and technological innovation, following a decade under the leadership of former CEO Eric Schmidt. But some feared Page, who cofounded Google while a computer graduate student at Stanford in 1998, would neglect the crucial CEO's task of managing the expectations of Wall Street.

The management changes at Google also come days after the departure of Senior Vice President of Product Management Jonathan Rosenberg, who according to the company had intended to leave in the next year or two regardless. Of the promoted executives, several had reported to Rosenberg.

Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Janice McDuffee

TechZone360 Contributor

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