Stephen Foley: Some 'adult supervision' will ensure Page keeps Google's fortune safe


US Outlook: Has Google just picked the wrong chief executive? Eric Schmidt, the Silicon Valley veteran who has been Obi-Wan to Larry Page's Luke Skywalker for the past decade, declared on Twitter that it was a case of "Day-to-day adult supervision no longer needed!" I'm not sure he is right about that. Without proper oversight, Larry Page could turn out to be the great squanderer of shareholders' money.

I'm casting this as a question only, as a maybe. But Google's investors will be wise to provide the adult supervision now.

Why worry? Google is a great technological university, its offices like academic campuses, its engineers the brainiest on Earth, its culture one of encouraging staff to pursue new ideas outside the scope of their jobs. It revolutionised not just search, but maps, books and email, and is trying to do the same for language translation. At the same time, it is reaping profits of $1m (£625,000) an hour from selling ads alongside search results and, increasingly, by selling display ads across the web, too.

But rolling in ungodly amounts of profit, and driven by a vision to "organise the world's information", Google has thrown shareholder money at new businesses and innovative technologies without showing the requisite amount of attention to costs, either in these new ventures or in its core advertising business. Time and again, since becoming a public company, its margins have disappointed Wall Street but investors have given it a pass because revenues have kept growing exponentially.

The quarterly results released Thursday, and overshadowed by the management reshuffle, were another case in point. Google added 1,069 new staff members in order to boost its local ad sales teams, leading to more grumbles from analysts.

A great corporate chief executive will be strong in three areas: innovation, monetisation and efficiency. No one better checks the first box than Mr Page, and with co-founder Sergey Brin and Mr Schmidt, Google's ruling triumvirate has been adept at turning their innovations into money. Mr Page is not apparently known for showing any interest in budgets, however, and this is a time when the temptation is to spend heavily trying to gain an entry into social networking and meet the challenge posed by Facebook.

Visionary founders are not inherently more likely to run amok with shareholder cash than other chief executives; if anything, less so, since they are often among the biggest shareholders themselves. The likes of Larry Ellison, of Oracle, or Michael Dell had all three of those chief executive qualities. But they needed to pay attention to efficiency, since their business relied on making the costs of their products competitive. That's not something that looms large at Google, in an era where internet companies give everything away free to their users.

Self-discipline is so much harder inside a company that is having a mini-dot.com boom all of its own. That's why adult supervision will always be needed.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower