Google CEO Eric Schmidt OUT, Larry Page in: Was Schmidt too nice to beat Apple?

Innovation, the Internet, gadgets, and more.
April 13 2010 5:16 PM

Eric Schmidt Is the Nicest Guy in Tech

Is that why Google replaced him with Larry Page?

As part of its fourth-quarter earnings report, Google announced on Thursday that co-founder Larry Page is replacing Eric Schmidt as the company's CEO. In a blog post befitting his nice-guy reputation, Schmidt wrote that he was proud of his past decade as CEO and that he was "certain that the next 10 years under Larry will be even better!"Last year, Farhad Manjoo analyzed whether or not the ex-CEO might have been too nice to keep Google ahead of Apple. His essay is reprinted below.

Eric Schmidt. Click image to expand.
Google CEO Eric Schmidt 

On the last Friday in March, a Gizmodo reader snapped a photo of Eric Schmidt and Steve Jobs huddled around a small table outside a cafe in Palo Alto, Calif. This was a surprise: Apple and Google had once been Silicon Valley's best pals, but over the last year their relationship had soured very publicly. Now the two CEOs looked to be stuck in some kind of awkward—and maybe staged —attempt to patch things up. Gizmodo asked a body-language expert to analyze the photo of Jobs and Schmidt. The conclusion: Both men seemed uncomfortable, but Schmidt's posture was more noteworthy. As he spoke to Jobs, Google's CEO hunched his shoulders subserviently, the way criminals do when they're around the police. Schmidt, the body-language expert concluded, is scared of Jobs.

It's not just body-language analysts who think so. This is the general picture of Schmidt among tech-industry gossips—that he's a brilliant manager who's helped make Google the most revolutionary company in the world, but he's not a guy you'd bet on in a knife fight. And a knife fight is exactly what Google is getting into by competing with Apple in the cell phone market. Bill Gates, the last guy to beat Apple, managed to do so by being totally ruthless—copying other companies' innovations and squeezing out firms that refused to toe his line. Schmidt doesn't seem to have that kind of ruthlessness in him.

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Here's a crazy thing about Eric Schmidt: Unlike Jobs, Gates, or Oracle's Larry Ellison—the industry's three dominant personalities over the last couple of decades—Google's CEO is widely considered to be nice. To the extent that anyone criticizes him, it's mainly to point out his dorkiness. Gawker has hounded Schmidt over the last few months about his alleged extramarital affairs and his attempts to ingratiate himself with Sergey Brin and Larry Page, Google's co-founders. But that story seems less scandalous than pathetic; just look at these pictures of Schmidt trying to look cool at Burning Man. In March, when the New York Times reported on the fracturing relationship between Apple and Google, Jobs declined to comment. Schmidt, meanwhile, was anything but cold, calculating, and distant. "I continue to believe, as many do, that Steve Jobs is the best CEO in the world today, and I admire Apple and Steve enormously," Schmidt declared.

Is Schmidt—and, by extension, Google—tough enough to stay on top in tech? People have been asking this question about Google for years, but rarely has it mattered as much as it does today. Google got where it is by being smarter than everyone else; its search engine is the product of brainpower, not mercilessness. But Google's competitors are different now. Schmidt believes that the future of computing is mobile—phones and other small devices will be our main access points to the Internet, and thus our main access point to Google. If Apple wins the war for mobile computing—that is, if most mobile Web traffic continues to flow through Apple's devices—Google could find itself in a very tough spot. Indeed, it already looks like Apple is moving to squash third-party advertising networks on the iPhone and iPad. Nearly all of Google's revenues come from advertising. Schmidt, then, has every reason to be scared of Jobs—Apple's moves in mobile could put a major hurt on Google's bottom line.

Yet there are several things that the Schmidt-as-wuss storyline gets wrong about the Google CEO and his company's conflict with Apple. The most fascinating thing about the Apple-Google "war" is its one-sidedness. Only Jobs seems personally affronted by the two companies' overlapping businesses. "Make no mistake: Google wants to kill the iPhone. We won't let them," Jobs told employees earlier this year, adding that Google's "Don't Be Evil" mantra is "bullshit." By contrast, few at Google ever say anything to suggest they think of Apple as anything more than a friendly, misguided rival. That's because Google is playing a longer, bigger game than Apple, and Schmidt has more ambitious plans than to simply win the market for mobile phones.

Schmidt doesn't hide his grand vision. When he speaks, he comes off as a professor rather than a businessman, a guy who's far less interested in consumer electronics than in big ideas. In October 2008, the week the U.S. economy had ground to a halt and Congress was poised to pass a $700 billion bailout plan, the Google CEO was talking up Google's sprawling renewable-energy stimulus plan, which Schmidt believed could "solve all of our problems at once." He didn't seem the least bit worried that the crashing economy would sour his own company's fortunes (and in fact, Google's revenues barely slipped). Schmidt gives such big-idea talks all the time. He holds forth on the future of information with people in the newspaper industry; on the future of tech innovation with systems administrators; on the future of the country in his numerous chats with Barack Obama. (Schmidt endorsed Obama during the election and now sits on the President's Council of Advisors on Science and Technology.)

How will Schmidt's broad-mindedness play out in Google's war with Apple? What sets Schmidt apart from other tech leaders is the same thing that sets Google apart—he has an abiding belief in the power of good engineering and in the idea that open systems will win. Apple's devices are popular, but like Microsoft's Windows empire, the Apple edifice is tied to what Google thinks are unsustainable strategic decisions: the decision to lock down the App Store or to manage every single aspect of the iPhone and iPad interface.

I've argued that locked-down devices aren't necessarily as doomed as Google and other techies argue. Consumers obviously like the safety and convenience afforded by some tech restrictions, and Apple could continue to dominate the industry even if it never opens up the iPhone. It's telling that other tech leaders have responded to Apple's restrictions with their own strong-arm tactics—see, for instance, how Amazon has been playing hardball with book publishers in order to keep them away from the iPad. That's not how Schmidt operates. I wouldn't expect Google to do anything to restrict its services from iPhone, iPad, or Safari users, and I'd be very surprised if it responded to Apple's anti-Android patent lawsuit with any similar legal maneuvers.

In Google's universe, tactics like those suggest insecurity, and Google is the most confident company in tech. What other company would come out with a plan to solve global warming, the recession, and our long-term national debt in one fell swoop? Schmidt believes his people are smart enough to get around any roadblocks Apple could throw in their way. That's why I think the body-language expert was wrong. When Eric Schmidt slumps his shoulders and says that Steve Jobs is "the best CEO in the world," it's not because he's shaking with fear. He's just being nice.

Become a fan of Slate  and  Farhad Manjoo  on Facebook. Follow us on Twitter.

Farhad Manjoo is a technology columnist for the New York Times and the author of True Enough.

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