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Google CEO shakeup: Advantage Microsoft in apps war?

Shane O'Neill | Jan. 25, 2011
As Google continues its fight to court the enterprise, will new CEO Larry Page help or harm that push? Some folks paint Page as a t-shirt wearing, Wall Street-oblivious CEO, but analysts say Microsoft may not have much time to celebrate.

That criticism may be reinforced by the decision to bring back the man who last led Google in 2001 when it was a rapidly growing, but one-dimensional search upstart.

"With its reliance on search for revenue, a lot of people see Google as standing on one leg," says Kay.

If this perception grows, adds Kay, Microsoft can lean even more on its go-to argument that Google is an Internet company designed for consumers, and not fit to serve the enterprise.

Risk of Turning Off Enterprises

Part of the reason Page wanted to be CEO again, according to a Wall Street Journal cover story, is that decision-making at the company had become bogged down by bureaucracy. With this move, Google intends to return to its nimble roots to fend off fast-moving upstarts like Facebook and Groupon.

But Google is arguably too big to run like a startup, and a realignment toward the small could make any enterprise skeptical about Google's commitment to businesses — which sounds like music to Microsoft's ears.

Nevertheless, industry analysts still believe Google will keep supporting its internal business group and investing in Google Apps. After all, Google's core business of search can't prop up the company forever.

"Google's business group gets good support overall," says Forrester research (FORR) analyst Ted Schadler. "With Google's core search business under attack from Bing and Yahoo (YHOO), I would expect them to keep investing in Google Apps for Business."

And Microsoft might not want to get too comfortable with the idea of Larry Page as the t-shirt wearing, Wall Street-oblivious CEO: Page may just be an interim leader as Google looks for another Schmidt, Kay predicts.

"I think they'll realize they need an operations person in that role and hire a COO with a malleable ego who can transition to the CEO," says Kay.


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