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

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.

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