John Paczkowski

Recent Posts by John Paczkowski

Google's Page Begins Major Reorg: Engineers, Not Managers, In Charge

Jonathan Rosenberg said his resignation from Google yesterday was precipitated by Larry Page’s return as CEO, but unrelated to Page’s effort to restore the urgency of innovation and nimbleness that was once the company’s hallmark.

And that may well be the case.

Certainly, Rosenberg has been crucial to Google’s success, so his exit has come as a shock to pretty much everyone to whom I’ve spoken.

That said, its timing seems quite convenient, particularly in relationship to what looks very much like a significant reorg that is currently underway at Google, said sources familiar with the situation.

Note first that Rosenberg’s replacement wasn’t immediately named and it’s not clear whether Page even feels one is needed.

But sources close to the company tell me it is likely to be much more than just Rosenberg’s departure.

The main theme that seems to be emerging: An elimination of Google’s more centralized functional structure–where Rosenberg was one of several manager kingpins–to one in which the individual business units and their engineers, such as its most independent Android division, rule more autonomously.

Reimagined like this, Google would become an ambidextrous organization with more powerful unit line execs, mostly engineers, doing what needs to be done to succeed, less burdened by the need to vet every little effort through various managers of Google’s powerful operating committee.

And that might mean fewer of those centralized execs–which raises the question of which general manager is next to go, whether on their own volition or not.

There is much speculation within Google about this, and it will surely increase now with the departure of Rosenberg.

The up and down fate of certain execs will be important signs of what’s coming, especially that of Chief Business Officer Nikesh Arora, Business Operations SVP Shona Brown and David Drummond, SVP of corporate development and chief legal officer.

So too the execs running business units at Google. Even now, for example, YouTube operates somewhat independently from the main part of Google. The question is, can such an engineering-driven structure be applied to local, social, commerce and more?

The goal, of course, is laudable–for Google to have significantly less bureaucracy and a more consistent stream of innovation.

But is this a good idea?

Looking at the company’s Android unit, the answer would appear to be a resounding yes. Under Andy Rubin, the Android team has developed its own structure and processes and it’s excelling in the market. Google’s role here is more nurturing parent than anything else. In other words, it’s supporting innovation, not micromanaging it.

That jibes well with Page’s push to whittle down Google’s manager bureaucracy, eliminate politicking and rekindle its start-up spirit.

And it also offers the added benefit of making him the centerpoint of the entire company.

Because make no mistake, these autonomous divisions under discussion would all have one thing in common: Larry Page.

In other words: He’s the CEO, functionary!

In essence, he would be their Lord High Engineer (and Executioner, in all senses) and their connection to the rest of the organization.

Which puts him in a very Steve Jobsian position, in which he’s the company’s one true arbiter.

That’s worked out well for Apple, but its culture is very different from Google’s. And Page and Jobs are as dissimilar as they come.

That said, if Page’s vision of a new, ambidextrous Google fosters the same sort of incremental and radical innovations we’ve seen come out of Apple in the past decade, that would probably be a good change.

Because change is just what Google so needs–and it seems it has begun.


comments so far. Add yours.

  • Anonymous

    What is so successful about Android? Seriously. Google makes more money on iOS users, who use more apps, Web, and view more apps, convert better, and spend more money. And the iOS installed base is 2x Android. And the Googlers I know hate Android and Rubin. Like seething hatred.

    Google needs to speak more with one voice, so if Page is that voice, then good.

    What Google really needs, though, is more diversity in its workforce. They need designers, artists, people who are not impressed by crappy ideas just because they are well-engineered.

    Look at that letterhead. It’s as if from a child. Ugh.

  • http://www.ratdiary.com spragued

    Engineers in charge of social strategy? This is an early Christmas gift for Facebook. And an engineer-led company heading into an era of anti-trust investigations is a bonus for Microsoft.

  • Anonymous

    JohnDoey, I think you nailed it. Diversity would do wonders (as an outsider looking in…).
    Also, I’m not sure “getting rid of management” is the right idea, but it does seem they have a poisoned mgmt structure/system. Does Google have a set of objectives they are driving for? How do they know if the decisions and actions they take are pushing Google in the right direction? Is Picassa (for example) a success? Will it get canned like Wave? How do users know?
    Adding a human “voice of Google” to clarify direction and decisions (like Apple/Jobs) would seem to be very beneficial.

  • Anonymous

    Oh wow, OK, I never thought about it like that before. Makes pretty good sense dude.

    http://www.anon-tools.no.tc

  • http://thewireless.blogspot.com/2011/04/how-to-get-ex-boyfriend-back.html Exback

    Well, looks like Larry is going to make for some interesting articles/posts in the future…can’t wait to see how this plays out…is he a genius or wasn’t ready…time will tell.

  • http://www.tnl.net Tristan Louis

    Wouldn’t this model basically turn Google into IAC?

  • Anonymous

    You are aware that facebook was created by engineers, right?

  • http://pulse.yahoo.com/_TFHSZD56EQVADWM3L6QCDM7UKU JinS

    I am afraid to use any function on Android phone. It will drain all the battery in a minute. I think IPhone has a llittle battery life and easier function. I think next time I’ll just get a plain phone and have small tablet.

  • Anonymous

    I have to agree with JohnDoey, FMPOV the jury is still out on Android whose success is as much a factor of the handset makers’ and carriers’ desperation to compete with the iPhone as to anything Google did other than engineer a reasonable copy of iOS with a few tweaks and of course, give it away for free.

    The real problem at Google is that their one revenue stream, advertising, is also the main revenue stream of its arch rival Facebook and soon to be the main revenue stream of Twitter.

    So many startups these days have the idea that they’ll give away some cool service or other and then they’ll grow fat with users and use an advertising model to make oodles.

    The advertising pie which is limited in its size that Google once dominated is going to come under increasing attack and at the moment driverless cars and ultrafast broadband in Kansas are not going to make up for lost revenue. One wonders whether the current business groups have the breadth of vision to spot new revenue streams. Will they just keep digging the same hole deeper or will they actually be able to start digging a new hole?

  • http://www.ratdiary.com spragued

    We’re all aware of that every time we have to bend to FB’s limited conception of “friend”. My point was that they have nothing to worry about from the other socially-challenged geeks at Google.

  • http://twitter.com/bascule Tony Arcieri

    That’s all well and good, but who else is there to compare to besides Apple? RIM? Microsoft? Android is now the Smartphone market leader in the US according to comScore, with 1 in 3 Smartphones running Android:

    http://www.comscore.com/Press_.....rket_Share

    Sure, they’re copying Apple, but they’re doing a damn good job of it. In the meantime Google is raking in a billion dollars a year on mobile ad revenue.

    And for what it’s worth, I’m an iPhone/iPad owner, not some Android zealot.

  • http://profiles.google.com/billpier314 Bill Pierpont

    Total BULL!

  • Anonymous

    Google’s mobile ad revenues from Android have never been broken out have they?

  • Anonymous

    Google will remain the dominant force so long as the internet itself is the dominant force and not a particular application, which it will be. The other innovations that Google is leading are to open up their ad revenue sources – Android for mobile, Google TV for television etc… You cannot really compare Twitter and Facebook to Google. While they both have very big potential for ad revenue they are still very specific applications and ones that will only consume a fraction of the user’s time that Google/web does. I expect to see some effort, especially with Facebook, to get people to spend more time there but until that happens Google’s model will reign supreme.

    You cannot compare ad revenue for single destinations to the entire web.

  • http://ARMdevices.net/ Charbax

    Ask the autonomous AdMob, they’ll tell you Android users are more worthwhile, use the internet more and better, use ads more and better. Android is the biggest technological success story of last year, and is poised to be it again this year as it’s about to dominate tablets faster than it dominated the smartphone.

    Apple does not have designers, artists in charge of anything. The bosses at Apple are only marketing/sales types that focus only on making their next quarterly earnings report look good.

  • Anonymous

    I think you miss my point. There is only a limited (big but limited) advertising pie and more and more firms are basing their biz around it. At some point that has to limit Google’s ability to grow. That is Google’s fundamental problem, that and the fact they’ve been wholly unable to replicate their impressive revenue growth with a “non-advertising” revenue stream. Investors are showing their concern in that Google shares are trading lower today than they were 12 months ago. Not good.

    Google’s revenue became huge because they were a disruptive force to old media advertising and Google dominates the “open” web. But the open web itself is in transition and folks who hold on to the web’s past as their vision of the web’s future *may* well find themselves disappointed by the move to paywalls and curated walled gardens. We don’t know how this is going to play out of course but “open” minded people can see movement away from the “open” web and if that happens Google is in deep water.

    Statistics from Jan 2011 show people spending almost 3x as much time on Facebook as in Google services and the number of people using Facebook vs Google is almost even. But my central point is that its not Google vs Facebook but Google vs everyone whose biz plan calls for a large user base and then serving up adverts.

  • Anonymous

    “I think IPhone has a llittle [more] battery life and easier function.”
    Depending on how you use your phone and which Android/iPhone model you’re using, you think wrong.

  • Anonymous

    Your assumption seems to be that every site will develop their own home-grown advertising platform? I don’t believe that’s the case. Certainly the larger entities will undoubtedly develop their own, but as an advertiser you are concerned with effectiveness so unless that is drastically different from one service the next there will not be a mass exodus. There just cannot be 20, 50, or 100 different sources to advertise on. Not only is it terribly ineffective but it would be considerable investment in time to learn how to use such platforms. I can possibly foresee this in the future when there will be such a large amount of sites catering to specific needs that an advertiser can target their audience very specifically, but in that realm it will still have to be driven by an over-arching force otherwise it will be a mess.

    Developing a custom ad-serving platform is a very, very difficult thing to do (I work for a major one). This is a space that will be driven by large entities for the foreseeable future, which boils down to the few, current major internet players.

  • Anonymous

    Running out of reply buttons this is a reply to methodin’s post below. I’ll grant you that not every site will develop its own advertising platform. There are plenty of companies already serving advertising which are being gobbled up by Google’s competition. To wit, Apple’s purchase of Quattro, Rim’s dalliance with Millenial, Nokia’s purchase of Enpocket, Microsoft’s purchase of ScreenTonic, AOL’s purchase of Third Screen Media…

  • http://twitter.com/veggiedude Tony Martin

    There are tons of sources – just google them! iOS users browse more than their Android counterparts. They also buy apps far more also (82.7% vs 5%). That means they use Google more and Google makes money on ads and clicks.

  • http://twitter.com/veggiedude Tony Martin

    Greatest success? And yet it only had 5% of app sales last year. Apple iOS had 82.7% of all app sales.

  • Anonymous

    Not a good idea. Managers are trained at people skills (no doubt many still lack heavily in this area…) But consider how many Engineers have people skills???? See my point. Bad move Google.

  • Carol Davidek-Waller

    If Microsoft had done that, it’s stock wouldn’t have been flat for more than a decade.

  • http://ARMdevices.net/ Charbax

    Says who? Google doesn’t say how many app sales they are making. And so what. Angry Birds is making more profit being free on Android than it does being for sale on iOS.

  • http://ARMdevices.net/ Charbax

    Android users use the browser more.

  • Anonymous

    You can’t compare the two and it’s irresponsible to even try.

    The only thing that seemingly binds Google and Microsoft’s corporate cultures these days is their increasing overlap in enterprise services and also their antitrust probes.

    Even then, Microsoft, even its heyday, never attempted the volume of projects that Google now (or maybe this will now be a thing of the Schmidt-era past) spits out every two weeks. And despite whatever other similarities there may be in their approaches and the make-up of their various streams of revenue, it’s clear Google is still a much better position than Microsoft was a decade ago, even with uncontrollable economic events, legal inquiries, and competitive factors all considered.

    It took Microsoft a decade to figure out how to diversify from their bread and butter, which was Windows and Office. It is also worth pointing out that this had not begun under Gates’ watch, but rather his successor’s, Ballmer’s. And even then, it’s not exactly all his fault nor a case of engineers having too little power. You could actually make a case of the opposite circumstances.

    Meanwhile, Google, though still is searching for an over-arching strategy to unify all its services, still relies heavily on advertising, is nowhere near the bloated payroll of Microsoft nor is its stock anywhere near as diluted. Also, one could argue that this slide happened under Page’s predecessor’s watch, not the other way around (as in Microsoft’s).

    Though some may argue that the antitrust probes with Google may actually be more severe than they were with Microsoft, there is actually a flip side to that as well. Google is obviously a strong force in its market, but no where near as entrenched as Microsoft was. They are far more vulnerable on nearly every front and as far as I’m aware, are the only tech company that has every OTHER tech company gunning for them at once (Apple, Facebook, Microsoft, Twitter, Amazon, etc).

    That is the reality of today’s tech landscape. It is profoundly different from 10 years ago, when finding sources of revenue in the online world were still immature. Google will likely make it out alright in the end, but will probably come away a whole lot more humble and focused as a result.

    And that is a good thing.

  • Anonymous

    Methodin, are you seriously equating Goggle with the Internet itself? Are you insane? Google is but a blip on the radar – the Internet as we know it is what, 15 years old. In another 15 years you will not even recognize the Internet and I doubt that Larry Page has the vision and leadership skills to keep Google at the forefront. I mean come on, what exactly has Larry actually created other than a fancy way to rank web pages based on their relationship with other webpages. He didn’t create their one revenue source, someone else did that. He didn’t create Android, they bought that. He didn’t grow the company significantly, the former CEO did that. I remember telling an intern something very similar to this 10 years ago – and he told me I was crazy to think that the web wouldn’t be dominated by Yahoo for the foreseeable future. You’re not an intern are you?

  • http://pulse.yahoo.com/_CUTQWU5DFFGR4QZCV3ABCUZ7IU Dathu

    This is a good move by Page to maintain the brand value of company some time we have to take hard decision.Steve and Page these two different from their own style and way of approaching to work.

  • http://pulse.yahoo.com/_CUTQWU5DFFGR4QZCV3ABCUZ7IU Dathu

    This is a good move by Page to maintain the brand value of company some time we have to take hard decision.Steve and Page these two different from their own style and way of approaching to work.

  • Anonymous

    No you’re right. He didn’t create their one revenue source. Someone else did. That he hired. He didn’t create Android, they bought that. And it was his idea.

    You think even someone like Steve Jobs got a pen and paper out and sketched out the iPad in a day? No. He had a few vague ideas maybe and then as the years went by honed in on it and took all the credit. All tech ceos are like that, standing on the shoulders of giants as it were.

    You shouldn’t be so quick to insinuate that Page is just as foolish as you are. Ideas don’t count for a lot, they’re a dime a dozen, as the old cliche goes. Experience is pretty marginal too; you can hire people who are experienced… oh, which reminds me… as they hired Schmidt.

  • http://about.me/bernardmoon Bernard Moon

    I’m not sure if you’re framing this correctly. Especially since you use Android as an example. It’s not a movement of putting engineers in charge over product managers, but more so a movement towards independent business units (i.e. Android) versus top-down product strategy.

  • Anonymous

    Alright gaysayer, I deserved that little zinger. I shouldn’t have been so snippy and I toned down my original post a bit. But, I still stand by my original opinion that Page is not equipped from a leadership, product development, or visionary standpoint to run Google effectively. Now, if he surrounds himself with talented and complementary executives, he may do alright. But, I get the sense that Page has an inherent distrust of non-engineers (i.e. people that don’t think like him) and I see more of a Yang style return to the helm rather than a Jobs style return.

  • Anonymous

    An google cares why.

    Google wants there adverts on the Apps and they there adverts to fund the apps that where Google makes there money. I have no doubt sales figure mean little or nothing to Google. Downloads figure probably means more for them than sale figures.

  • Anonymous

    If you are going to attempt to blast Google, and you clearly are by your incoherent tirade, at least keep it on point. We are talking about Google’s advertising model as it relates to their core business.

    If you knew anything about Yahoo you’d laugh at that statement as well.

  • Anonymous

    In reply to your last comment: I can agree with the sentiment around Google’s competition eating up advertising companies but in a general sense they seem to be attempting to find a way to put a dent in Google’s armor rather than innovating themselves to create a new dynamic that would give them a leg up. Granted Apple has done a good job and has led the way in mobile but Apple will only ever advertise on Apple, while Google can still advertise on Apple products. The other companies don’t seem to have that ability. Can you foresee this changing in the near future? I think in a general sense its smarter to bet on the technology itself and not the individual product or implementation, which is why Facebook and Apple are at an extreme disadvantage.

  • http://pauloflaherty.com Paul OFlaherty

    Amazing how much Google is starting to resemble a young Microsoft! Just saying ;)

  • Anonymous

    Android is good, I love my Android phone, but Android does not make Money! YouTube is nice, I watch things there few times a week, but YouTube does not make Money!

    We Engineers can create nice things, but we don’t know how to make money, and if we don’t make an income, then we will sit at home eventually doing nothing :-)

  • Anonymous

    You’re right, I was engaging in some bashing and was really off topic concerning your original post, so I apologize for that. More on topic, I think it’s dangerous to assume that the current dominant player will remain so indefinitely. I understand the allure of opening up other platforms for Google’s advertising strategy but is that what Google has become, a big advertising company? If so, I don’t believe that bodes well for the long term success of the company. Now, I don’t think anyone is going to out-Google Google (i.e. out-compete AdWords and AdSense). The more likely scenario is that some young upstart will create a model which makes current advertising models irrelevant, or at least much less dominant than they are today. This would essentially cut the legs out from Google’s primary revenue source and I’m not sure they are nimble enough to adjust.

  • http://www.dlitz.net/ Dwayne Litzenberger

    “Look at that letterhead. It’s as if from a child. Ugh.”

    Why is it important that the letterhead—of the CEO of an engineering-oriented company like Google—appeal to the tastes of a graphics artist?

  • Anonymous

    Look at the address — Google is in Mountain View now, not Palo Alto. That business card, and letterhead, was back from Page’s “just out of grad school and working on a small project called Google” days. The cards today look much better.

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