This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Blankenhorn: Has Google's Larry Page Lost the Plot?

Stocks in this article: GOOG YHOO MSFT IBM FB AAPL

NEW YORK ( TheStreet) -- Every great company is a dictatorship. But no dictator can run a great company alone.

While most press comment on Google (GOOG) Thursday centered on its closure of Google Reader, as with my friend Glyn Moody at ComputerWorldUK, the bigger news is the replacement of Android chief Andy Rubin with ChromeOS head Sundar Pichai, as reported by Wired.

Pichai is said to be "closer" to CEO Larry Page than Rubin was, and it's no longer questioned that Marissa Mayer, now CEO of rival Yahoo! (YHOO), didn't jump from the Googleplex but was pushed out by Page.

So the question becomes, is "focus" just another term for all power flowing through the CEO's hands? Is that CEO head now to be surrounded only by yes-men?


Pride goes before a fall, and Page has a lot to be proud about. He co-founded Google alongside fellow Stanford grad student Sergey Brin, and in 15 years has built a company that is now bigger, in market cap, than either Microsoft (MSFT) or IBM (IBM).

He did it with a relentless focus on one metric -- the cost of managing and moving huge mountains of data. Over the last decade Google pioneered the use of commodity PCs over high-end servers, bought dark fiber at the bottom of the dot-com recession, built a network of data centers to bring content closer to users, and pioneered in renewable energy to lower costs still further.

All this gave Google an incentive to do anything that would increase Web use, because it paid less to serve that use than rivals and so could crush them with its lower costs. Monetization could wait.

It's now clear that it can't wait any longer, and investors have cheered the new, more ruthless Google. If you bought Google at the bottom of the 2008 crash, at less than $263/share, you have recorded a gain of about 215%, with the price now topping $825.


But along the way Google has lost something. It has lost the belief on the part of users that it's different, that it cares more about people than, say, IBM or Microsoft does. It has become an empire, Larry Page is its emperor, and anyone who might question Page's decisions now knows that the price of speaking up is banishment.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs