Google’s Startling Transformation Under CEO Larry Page

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March 28 2012 4:58 PM

Google’s Grand Plan

The search company no longer dabbles in exotic ideas. Now, it’s all business.

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Regulators are slowing Google down.* Google is big enough, now, that it expects a rigorous regulatory review of every one of its major purchases. At the time I spoke to Lawee, he couldn’t discuss the Motorola purchase because that deal wasn’t done; the Justice Department finally approved the purchase in mid-February, six months after Google announced the deal. Google saw similar delays after its purchase of ITA and the mobile advertising firm AdMob.

Several Google reps told me they’ve grown used to managing acquisitions through regulatory delays. Even while the DoJ is reviewing a major purchase, Google works with staff at the new firm to train them on the search company’s ways of doing business. “We do not slow down our integration efforts at all during that time,” says Marcella Butler, a senior director of corporate development who manages how new firms are integrated into Google.

Still, there’s evidence that the regulatory inquiries have made the acquisition process rockier and more unpredictable.* “It’s a painful process. There’s uncertainty to it—there’s a higher power that’s going to decide what’s going to happen with your company,” says Jeremy Wertheimer, the founder of ITA. Lawee cites one instance where the regulators affected the outcome of a Google deal. Omar Hamoui, the founder of AdMob, left Google shortly after the Federal Trade Commission approved Google’s acquisition of his company.* Lawee says there were several reasons for Hamoui’s departure, but one of them was the emotional toll of the FTC’s inquiry.* “I don’t think people realize how hard it is when the government is asking you for documents every day,” Lawee says. AdMob has helped Google make a killing in mobile ads, but Lawee believes the business “would have been much better with Omar.”

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Larry Page wants results. This is perhaps the most important change since Page took over: Gone are the days when Google would buy a company only to have it disappear without ever producing a product. Page now expects direct, regular reports from Google’s acquisitions team on how recently purchased companies are performing. “Larry is very keen to make sure that the strategic rationale for every deal is well-understood,” Butler says. That seems an obvious thing for a big corporation, but it’s unusual at Google, a firm known to dabble in ideas just because they seem interesting, even if there’s no apparent payoff. Page’s management style suggests the end of an era. These days, Google means business.

Corrections, March 29, 2012: This article originally and incorrectly stated that Google’s acquisition of AdMob was investigated by the Department of Justice. The Federal Trade Commission conducted the investigation. This article also originally misspelled the last name of AdMob founder Omar Hamoui. (Return.)