End of an era at Google as founders step aside

SAN FRANCISCO — Larry Page and Sergey Brin, the Stanford graduate students who founded Google over two decades ago, are stepping down from executive roles at Google’s parent company, Alphabet, they announced Tuesday.

Sundar Pichai, Google’s chief executive, will become the chief of both Google and Alphabet.

The move is an end of an era for Google. Page and Brin have personified the company since its founding and have been two of the technology industry’s most influential figures, on a par with the founders of Apple and Microsoft, Steve Jobs and Bill Gates.

Their early work on the Google search engine helped corral an unruly cloud of information on the World Wide Web. And their ideas about how to run an internet company — like offering generous employee perks like free shuttle buses to the office and making rank-and-file employees feel as if they have a stake in the company — became a standard for Silicon Valley.

Page and Brin took a lesser role in day-to-day operations in 2015 when they turned Google into Alphabet, a holding company that includes self-driving car company Waymo under its umbrella.

Since then, they have spent more time overseeing a variety of so-called other bets, like life-extension technology, while Pichai ran Google and its enormous search and advertising business. The business has continued to grow, and Alphabet is among the most valuable companies in the world, but the internet giant is entering one of the most turbulent periods in its history, with antitrust scrutiny, employee walkouts and growing public skepticism of its power.

Page and Brin, who are both 46, will remain directors on Alphabet’s board and the company’s two largest individual shareholders. They retain a majority of the company’s voting shares, which will give them effective control over the board and ensure they still have a say over the company’s future.

“Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost,” the founders wrote in a public letter Tuesday. “While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents — offering advice and love, but not daily nagging!”

The move confirms the ascendancy of Pichai, 47, as one of tech’s most powerful people. While he has run the core Google business for four years, he has still reported to Page, Alphabet’s chief executive, and Brin, its president.

Now he is the sole executive in charge of a company that has giant businesses in search, advertising, maps, smartphone software and online video, as well as a variety of fledgling bets in far-off areas like drone deliveries and internet-beaming balloons.

In recent years, Page and Brin seemed to have lost interest in running the company they founded. The reorganization into a holding company was in part intended to address that. While Pichai took the reins of the often messy business of Google, Page and Brin would focus on what were effectively science projects.

Brin moved his desk for a time to X, the so-called moonshot lab where engineers worked on projects that were likely to fail — but had big potential if they didn’t. Page was rarely a presence on Google’s campus and was working on long-shot technology problems and personal side projects like his flying-car startup, Kitty Hawk.

They have largely disappeared from public view, at least as company representatives. Despite being the chief of one of the world’s most valuable public companies, Page did not speak on Alphabet’s quarterly earnings calls, appear for congressional testimony like other tech executives over the last year or sit for interviews with journalists.

One of Brin’s few on-the-record comments to journalists in recent years came at San Francisco International Airport when he was protesting President Donald Trump’s immigration policy. He told reporters he was there as a private citizen.

While Page and Brin had been a regular presence at weekly all-staff meetings in Google’s early years, they had all but stopped appearing over the last year.

One of Page’s last appearances at the company meeting was last year when he apologized to employees for his handling of the departure of Andy Rubin, a former senior executive who received a $90 million payout after the company deemed sexual harassment claims against him credible. In June, Page surprised investors and employees when he did not attend Alphabet’s shareholder meeting.

In recent years, the freewheeling work culture promoted by Page and Brin has run into trouble. Employees have staged public protests over the company’s handling of sexual harassment claims against executives, its treatment of contract workers and its work with the Defense Department, federal border agencies and the Chinese government.

The soft-spoken Pichai has been reluctant to confront the protests head-on, but he has quietly cracked down on employee unrest. Google has halted the weekly company meetings and placed restrictions on what employees can discuss on message boards.

Though working at Google is becoming more like working at other giant companies, Page and Brin’s interests and styles — like focusing on passion projects and math jokes — have become part of Silicon Valley iconography.

While other tech titans like Jobs and Gates were known for their sometimes brash and mercurial leadership styles, Page and Brin were low-key and cerebral. But not always. Brin sky-dived for a company event that introduced one of the company’s most disappointing products, the Google Glass wearable device. He was often spotted riding an elliptical bike to work.

That idiosyncratic style, that “Googliness,” became something company managers were told to look for in applicants.

Page and Brin are among the few tech company founders who have walked away from day-to-day roles at the company they created and that made them billionaires. Gates did something similar when he handed the chief executive role at Microsoft to Steve Ballmer in 2000, during his company’s long antitrust fight with the Justice Department.

While Google is now gearing up for its own antitrust fight, with investigations into its power in Congress, the Justice Department and nearly every state, there are notable differences with Microsoft.

When Ballmer took over as chief executive there in 2000, the company had just been found to have repeatedly violated the nation’s antitrust laws in a landmark case brought by the Justice Department. Pichai is still unsure what he faces from regulators and lawmakers. The scrutiny includes Google’s dominant market share in internet search and how it competes with smaller rivals in the digital-ad business.

“For Google, it is still to be determined just what it is facing on the antitrust front,” said David Readerman, a longtime technology analyst and portfolio manager at Endurance Capital Partners. “But that is a clear and present risk.”

In their letter Tuesday, Page and Brin said they would remain committed to the company “for the long term, and will remain actively involved as board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!”

Whatever they decide to do, they will have no trouble funding it. Page is worth about $58.9 billion, and Brin is worth about $56.8 billion, the sixth- and seventh-richest people in the world, according to Forbes.


2019 The New York Times Company

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Google's Sundar Pichai named CEO at parent firm Alphabet

SAN FRANCISCO - Google chief executive Sundar Pichai will assume the CEO role at parent firm Alphabet in a shakeup at the top of the Silicon Valley titan, the company said Tuesday.

Pichai will take over from Larry Page, a co-founder of the internet giant, at the holding firm which includes Google as well as units focusing on "other bets" in areas including self-driving cars and life sciences.

Page and Google co-founder Sergey Brin "will continue their involvement as co-founders, shareholders and members of Alphabet's board of directors," the company said.

In a letter to employees, Page and Brin wrote: "We've never been ones to hold on to management roles when we think there's a better way to run the company."

They added that Pichai "brings humility and a deep passion for technology to our users, partners and our employees every day" and that there is "no better person to lead Google and Alphabet into the future."

Alphabet was formed in 2015, giving a separate identity to the original company Google and other projects such as autonomous car unit Waymo and smart cities group Sidewalk Labs.

The 47-year-old Pichai, born in India, takes the helm at a time when Page and Brin have been noticeably absent and the company faces a torrent of controversies relating to its dominant position in the tech world.

Pichai is likely to fill a void at the company as it faces antitrust investigations and controversies over privacy and data practices in the United States and elsewhere. 

The company has also faced allegations of failing to adequately address sexual harassment in the workplace and of straying from the ideals espoused by the founders in the company's early code of conduct which included the motto "don't be evil."

"He's a technologist but he's been a steady hand for the last few years and has proven his ability to conduit business at the highest level," said Roger Kay, analyst at Endpoint Technologies Associates.

Kay added the move "ratifies that the (Google) founders have stepped aside almost entirely."

Pichai will have a new role as he faces up to claims from President Donald Trump of "bias" in internet search results, and the latest charge from Amnesty International that its business model leads to human rights violations by enabling surveillance of users.

Earlier this year, Pichai met with Trump and appeared to ease the US president's concerns that Google was unwilling to help the US military but was boosting China and its military.

Trump tweeted after the March meeting that Pichai was "totally committed" to US security.

Last December, Pichai kept calm as he parried US lawmakers over complaints of political bias and intrusive data collection.

"We build our products in a neutral way," Pichai said in one exchange with a lawmaker, and added later: "We approach our work without any political bias."

- Chennai to Silicon Valley -

Born to humble beginnings in the southern city of Chennai, he studied engineering at the Indian Institute of Technology (IIT) in Kharagpur before heading to the United States to further his studies and career.

After leaving India, he attended Stanford University and later studied at the Wharton School at the University of Pennsylvania.

In recent years, Alphabet has become one of the world's most valuable companies, with a 2018 profit of some $30 billion on revenue of $110 billion.

The 2015 reorganization appeared aimed at installing the startup mentality for new ventures, described by Google as "moonshots."

These ventures, including the life sciences group Verily and the biotech operation Calico, have been losing money.

Kay said the "other bets" have been struggling because even though they have the financial backing from Google's profits "they don't have the do-or-die element" of other startups.

juj-rl/bfm

Agence France-Presse

End of an era at Google as ex-CEO Schmidt plans to leave board

SAN FRANCISCO — Google’s parent company, Alphabet, said Tuesday that Eric Schmidt, its former chief executive, planned to relinquish his position on the board of directors in June.

His departure will end an era for the internet giant, in a shake-up of one of the coziest and most stable corporate boards in Silicon Valley. Another member, Diane Greene, who gained her seat in 2012 and had been running Google’s cloud computing business until this year, will also not seek re-election.

Schmidt, who was Google’s chief executive for a decade until 2011 and then its executive chairman for 7 years, oversaw the meteoric rise of Google from a useful search engine into an internet powerhouse.

He was brought into the company in 2001 to provide oversight for its young founders, Larry Page and Sergey Brin. He helped take Google public and oversaw major acquisitions like YouTube and DoubleClick, which cemented Google as an industry giant.

Schmidt stepped down as executive chairman of Alphabet in January 2018, but kept his board seat. He will not seek re-election when his term expires in June, Alphabet said. On Twitter, Schmidt said he would remain a technical adviser to Alphabet and Google.

Alphabet said it had appointed to the board Robin L. Washington, an executive vice president and chief financial officer of Gilead Sciences, a biopharmaceuticals company. Before the announced changes, seven of Alphabet’s 11 directors had been on the board for more than a decade.

The board has come under scrutiny because of a shareholder lawsuit filed in January that said directors had neglected their fiduciary duties by approving massive exit packages for executives accused of misconduct.

The lawsuit, citing minutes and emails, said board members had rubber-stamped compensation agreements hammered out by Page, Alphabet’s chief executive, who along with Brin owns voting control of the company.


2019 New York Times News Service

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Airbnb eyes the sky with hire of aviation exec

SAN FRANCISCO - Airbnb on Thursday said that it hired airline industry veteran Fred Reid away from an autonomous flight vehicle startup backed by Google co-founder Larry Page.

The move was described as part of an effort by the San Francisco-based firm to add "how you get there" to an Airbnb platform that already features lodging and activities.

"I'm not interested in building our own airline or creating just another place on the internet where you can buy a plane ticket, but there is a tremendous opportunity to improve the transportation experience for everyone," said Airbnb co-founder and chief executive Brian Chesky.

"We're going to explore a broad range of ideas and partnerships that can make transportation better."

In his job as global head of transportation, Reid will focus on travel partnerships and services, according to Airbnb.

Reid was hired away from his role as president of Cora Aircraft Program at Kitty Hawk where he oversaw development of autonomous electric aircraft capable of taking off and landing vertically, Airbnb said.

Reid's airline industry experience includes being chief executive at Virgin America.

"Whether in the air or on the ground, there are tremendous opportunities to create products and forge partnerships with other companies that make travel easier and even fun," Reid said, noting the mission could take years.

The move comes with Airbnb preparing for an initial public offering (IPO) as soon as the middle of this year at a valuation estimated to be more than $30 billion. The lodging startup last year said its quarterly revenues topped $1 billion for the first time.

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Google guru Page tests flying taxis in New Zealand

WELLINGTON - Pilot-less flying taxis are being tested in New Zealand as part of a project backed by Google co-founder Larry Page that supporters say will revolutionize personal transport. 

New Zealand regulators late Tuesday approved plans for Zephyr Airworks, a subsidiary of Page's company Kitty Hawk, to develop and test the futuristic air taxis.

Known as Cora, the electric aircraft has a dozen small lift rotors on its wings, making it capable of vertical take-off and landing like a helicopter. 

But developers say it is much quieter, meaning it could transport passengers in urban areas using rooftops and car parks as landing pads.

"We are offering a pollution free, emission free vehicle that flies dependably, we think this is the logical next step in the evolution of transportation," Zephyr chief executive Fred Reid said. 

The Cora prototype being tested in New Zealand's South Island uses three on-board computers to calculate its flight path and is capable of carrying two passengers.

The computers operate independently as a safety measure and the aircraft can deploy a parachute if anything goes wrong.

The aircraft, previously known as Zee.Aero, has a range of 100 kilometers (62 miles), reaching speeds of 150 kmh and an altitude of up to 900 meters (3,000 feet). 

The Cora project envisages the air taxis becoming so common that "air travel will be woven into our daily lives".

'LIKE SCEINCE FICTION'

Zephyr said using them would be a simple experience for passengers.

"You wouldn't have to know anything about flying a plane. Cora could fly for you," it said in a promotional video. "And it would be all-electric, helping to build a sustainable world." 

Page's company is also developing a prototype personal aircraft called the Kitty Hawk Flyer and unveiled an early model in the United States last year.

However, it looked more like a recreational plaything than a flying car, suitable only for flying above water and seating the pilot in an open top cabin exposed to the elements.

Cora appears far more robust, with a design more like a traditional aircraft featuring wings, a tail and a closed canopy for passengers.

The aircraft will not be offered for sale, instead the public must book trips like they would with an airline or taxi service. 

Zephyr said Cora took 8 years to design but then developers needed a suitable environment to safely test the new technology. 

They settled on New Zealand because of its uncongested airspace and rigorous regulatory environment, with Reid saying local officials had embraced the idea. 

"We had no idea what to expect," he said. "They could have laughed us out of the room. We were pitching something that sounded like science fiction." 

Cora has been given an experimental airworthiness certificate from the New Zealand Civil Aviation Authority. 

Trialling the flying taxi service will reportedly take 6 years, with operations based around the city of Christchurch. 

"This aircraft represents the evolution of the transport eco system to one that responds to a global challenge around traffic and congestion, and is kinder to the planet," Christchurch mayor Lianne Dalziel said. 

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Google 'Alphabet' website blocked in China on first day

BEIJING - Tech geeks in China looking to understand Google's newly unveiled corporate structure are out of luck: the website of the new parent company, dubbed Alphabet, was blocked less than 24 hours after going live.

Google unveiled a surprise corporate overhaul Tuesday forming Alphabet, a holding company that will include Internet search and a handful of independent companies, such as the research arm X Lab, investment unit Google Ventures and health and science operations.

So far the website only contains a letter from Google co-founder Larry Page and a link to Google's existing investor relations page.

But the website for Alphabet, www.abc.xyz, is already blocked in China, which operates the world's most extensive and sophisticated Internet censorship system, known as the "Great Firewall".

Despite the block, the announcement of Google's restructuring was widely reported in Chinese official media, including the People's Daily, the official Communist Party mouthpiece.

The Paper, a government-run news website, even named the parent companies' new website address in its report, saying the unorthodox mix of letters "broke with convention".

The California-based tech firm withdrew from China in 2010 over censorship issues, and the two have continued to have a turbulent relationship, with Beijing moving last year to fully block Google's hugely popular Gmail service.

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Google reorganizes under 'Alphabet' umbrella

SAN FRANCISCO - Google unveiled a surprise corporate reorganization Monday, forming a new parent company dubbed Alphabet that will include the Internet search unit as one of several entities.

Google chief executive Larry Page announced the change, saying he would hold the same title at Alphabet, the new holding company for the tech giant's newer ventures such as the research arm X Lab, investment unit Google Ventures and health and science operations.

At the search unit Google, the CEO will be current vice president Sundar Pichai.

"Our company is operating well today, but we think we can make it cleaner and more accountable," said a statement from Page, a co-founder of the tech giant with Sergey Brin 11 years ago.

"So we are creating a new company, called Alphabet. I am really excited to be running Alphabet as CEO with help from my capable partner, Sergey, as president."

Page said Alphabet is "mostly a collection of companies," the largest of which is Google.

Under the new structure, "this newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead."

Alphabet will include units focusing on life sciences such as a glucose-sensing contact lens and the health research firm Calico, Page said.

Google X, which handles research on self-driving cars and Internet balloons, will also be a separate unit

Other units to be separated include the drone delivery project Wing, Google Fiber's high-speed Internet, the home automation unit Nest and investment arms of the California technology giant.

"Fundamentally, we believe this allows us more management scale, as we can run things independently that aren't very related," he said.



- Strong leaders, independence -

"Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed."

Alphabet Inc. will replace Google Inc. as the publicly traded entity, and all shares of Google will automatically convert to shares of Alphabet, with all of the same rights, Page said.

Google will become a wholly-owned subsidiary of Alphabet. The Google unit will include search and search ads, maps, apps, YouTube, Android and related technical infrastructure, according to a regulatory filing.

The reorganization comes amid concerns that Google's dominance of the tech sector may have peaked as the landscape evolves.

Google has for years been the leader in Internet search and has turned advertising linked to those searches into a highly lucrative business.

But its shares have struggled since hitting an all-time high in early 2014 and it has little to show for ventures in other areas: self-driving cars, Google Glass, Internet balloons, health care, Google TV, mobile payments, home automation and its Google+ social network, among others.

"This is a pretty assertive move on their part," said Bob O'Donnell, who heads the consultancy TECHnalysis Research.

"There have been a lot of questions about their ability to grow outside of search. Search has been their cash cow for a long time."

The new structure means that each of the projects including "wacky" ones would have to stand on their own and produce results, O'Donnell said.

"There has been a sense they need to be more serious about these things," he told AFP.

Jan Dawson of Jackdaw Research agreed, saying in a tweet, "the biggest question about Google's Alphabet transition is whether we finally get transparency over non-core business finances."

Google shares rallied some 5.6 percent in after-hours trading on the news to $669.08

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Google gains entry to home and prized team with $3.2B Nest deal

SAN FRANCISCO- Google Inc took its biggest step to go deeper into consumers’ homes, announcing a $3.2 billion deal to buy smart thermostat and smoke alarm-maker Nest Labs Inc, scooping up a promising line of products and a prized design team led by the "godfather" of the iPod.

Nest will continue to operate as its own distinct brand after the all-cash deal closes, Google said on Monday.

The deal is the second largest in Google's history after the $12.5 billion acquisition of mobile phone maker Motorola in 2012.

Like the Motorola deal, which marked Google’s first major foray into hardware, the Nest acquisition gives Google a stepping stone into an important new market at a time when consumer appliances and Internet services are increasingly merging.

"Nest Labs appears to be focused on thermostats and smoke alarms, but it’s not far-fetched to see Google expanding this technology into other devices over time," said Shyam Patil, an analyst at Wedbush.

"Home automation is one of the bigger opportunities when you talk about the Internet of everything and connecting everything. This acquisition furthers their strategy around that," he said.

Shares of Google were up 0.5 percent at $1,128.49 in extended trading on Monday.

Nest gained a large following with its first thermostat - a round, brushed-metal device with a convex glass screen that displays temperature and changes hue to match the color of the wall it attaches to. It also tracks usage and employs that data to automatically set heating and cooling temperatures.

With the acquisition, Google gets Tony Fadell, a well-connected and well-respected Silicon Valley entrepreneur credited with creating Apple Inc's iconic iPod music player, along with co-founder Matt Rogers and a host of talented engineers and designers.

According to a search on professional network LinkedIn, roughly 100 of Nest's 300 employees have worked at Apple in the past.

Google, the world’s largest online search engine, is increasingly expanding into new markets, with efforts ranging from a high-speed Internet access business to advanced research on self-driving cars and robotics.

But while Google's engineering expertise has generated major advances in technology, the company has at times struggled to create hardware products that resonate with consumers as much as Apple's products do.

The consumer experience of Nest's products "is Apple-like and it gives Google that," said Pat Moorhead, an analyst at Moor Insights and Strategy.

"What Google wants to do is be the backbone for your home, how you consume energy, how you consume content like music through your entire house," said Moorhead.

Some commenters on Twitter expressed concerns about the privacy implications of the deal for Google, which collects scads of personal data about its users' online habits.

"Not content with your personal data, Google now wants your home data by buying Nest," read a Tweet by Irene Ng.

"So basically Google will know when homeowner is away, when they've had a fire & what the power bill is?" Tweeted Brian Makas, who appended the hashtag #creepy to his comment.

In an interview with Reuters, Nest's Fadell said the company spent a lot of time discussing privacy issues with Google during talks that led to the deal.

"The reality of the situation is inside of Google they take privacy so incredibly seriously you have no idea," Fadell said, noting that Nest's terms of service would not change after the deal.

Google said the deal is expected to close in the next few months pending regulatory approval.

EARLY BETS

Google has tried to gain a foothold in the smart home market before, launching the PowerMeter service in 2009. The service let consumers use the Web to monitor their home electricity consumption, but Google shut it down in 2011, noting that it hadn't caught on as much as Google hoped.

It was that same year that Nest's Fadell met with Google co-founder Sergey Brin at a TED conference, showing him a prototype of the thermostat. Google's venture capital arm, Google Ventures, made an investment in Nest not long after that.

Kleiner Perkins Caufield & Byers, the venture-capital firm that started backing Nest in 2010, made a return of 20 times on the $20 million it has put in over the years, for a return of around $400 million, a person familiar with the situation said. Shasta Ventures, which invested at the same time as Kleiner, stands to make a similar rate of return on its investment, a person familiar with the matter said.

Fadell said the deal with Google was the culmination of "countless" discussions that began in the summer of 2013.

"It took us months to get comfortable that they are going to bring to the table the things we need for scale and to realize our decade-long vision and that they really truly respected what we did," he said.

While Fadell's expertise in mobile products could be a boon to Google and its money-losing Motorola smartphone division, he stressed that his focus was on home automation products.

"That was one thing I was very clear about. I said ‘Larry, I have already built all kind of mobile products, I have done all those things. I am not here to build those,'" Fadell said, referring to Google CEO Larry Page.

"I am here to build out this vision. Not to go and build the other things I have already built in the past," said Fadell.

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Time for Google billionaires to invest in journalism?

(The authors are Reuters Breakingviews columnists. The opinions expressed are their own)

NEW YORK - Is it time for Google billionaires Larry Page, Sergey Brin and Eric Schmidt to invest in journalism?

In 2013, Amazon architect Jeff Bezos bought the Washington Post for $250 million and eBay founder Pierre Omidyar announced a new investigative reporting venture. Yet strictly by the numbers, few have made their money at the expense of the old-school pillars of the fourth estate quite as obviously as the Google guys.

In 2000, the year Google introduced AdWords, still its main advertising program, U.S. daily and Sunday newspaper advertising peaked at $48.7 billion, according to the Newspaper Association of America. It has since tumbled to less than half that level, some $18.9 billion in 2012.

The decline is widely attributed to the rise of the internet. In fact, without Google and its online rivals, print ad spending might have continued rising. At the pace of growth achieved in the decade before 2000, it would now be running around $80 billion a year.

It's uncanny, therefore, that of the $60 billion plus of potential annual ad sales that print publications seem to have lost, Google had grabbed about $44 billion by 2012, from virtually nothing in 2000. That two-thirds slice of the spoils is about equal to the company's market share of the online search business.

Maybe the mathematical symmetry is coincidental. But the larger point is not. Nobody has made as much money as Google disrupting the business model that once supported the edifice of journalism – an endeavor which, as Bezos put it, "plays a critical role in a free society."

Google has long maintained that it doesn't want to get into the business of creating content. That's fine. But Google's leaders, who have became fabulously wealthy individually, could still invest for their personal accounts – just like Bezos and Omidyar. If any tech moguls have reason to feel they owe it to the now cash-strapped world of journalism to give something back, it's Messrs Page, Brin and Schmidt.

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