Reference no: EM131003189

Founded in 1998, Google just had its most dominant year, with its search market share rising from 77 percent to 83 percent and revenues jumping 25 percent. Because most of the revenue came from search, Google is trying to diversify. But it faces intense competition in every market.

In traditional search, Microsoft's Bing search engine and Facebook, which passed Google as the most popular website in the world, pose threats as people desire more personalized and social media-related search information. Searches for local information, such as restaurant reviews or directions, are 20 percent of all Google searches and half of all mobile or smartphone searches. Yet, local-related search advertising is a weakness for Google, but a strength for Groupon, Facebook Places, Living Social, Foursquare, and Bing. Although Google's Android smartphones have more market share than Apple's iPhone, the Android software is open source, so Google makes no money except for built-in Google Ads and services. Likewise, Google trails Apple and Amazon in the number of publishers who use their software, devices (i.e., smartphones, tablets, book readers), and online stores to sell electronic versions of newspapers, magazines, books, music, TV shows, and movies. Finally, Google's Chrome web browser (13% market share) competes with Microsoft's Internet Explorer (55%), Mozilla's Firefox (22%), and Apple's Safari (7%).

In short, Google is trying to position itself for the day when people won't automatically use a Google search box to find information. Keith Woolcock, founder of 5thColumnIdeas, a technology research firm, doubts Google is up to the task, saying, "The problem for me as an investor is that Google looks a little too [much] like last year's model. It's the chicken in the sandwich-Apple and Facebook are on the opposing sides. Google is in the middle. Really, it looks to me as though it has become the Microsoft of its generation: big, bad and quickly becoming irrelevant."

Unfortunately, you fear that Woolcock might be right, which is why you replaced CEO, Eric Schmidt, who becomes executive chairman. When Google started, you were CEO for three years. But, as an introvert who prefers technology challenges to management issues, you were relieved to hire Schmidt from Sun Microsystems because of his extensive leadership experience. When Schmidt became CEO, Google was much smaller and still in start-up mode, so he focused on management and financial systems, while you and Sergey Brin focused on technology and product development. Google's philosophy was to hire really smart people and then let them do whatever they wanted. It was the norm for Google engineers to have 20 percent of their time to work on whatever they wanted to. And it spawned great products like Gmail, which engineer Paul Buchheit designed in a day and then shopped around, to get other Google engineers to join his team. This approach worked well until Google hit 10,000 employees. But at Google's current size, 24,000 employees, with plans to hire another 6,000, it leads to confusion, poor coordination, and a lack of focus.

Today, Google is a much larger, more complicated company. But the biggest problem is that paralyzing bureaucracy has slowed the company. As technology companies grow, this happens. IBM, Apple, Microsoft, and HP weren't immune, and neither is Google. In fact, the key reason you became CEO again was to streamline decision making and communication, and create clearer lines of responsibility and accountability. But how do you do that in a company of 30,000 people? A related problem is that top management is increasingly isolated from middle- and lower-level managers and employees who are responsible for the research and project management that is key to Google's success. So, what might you do to improve upward communication within the company? Finally, what can Google do to communicate effectively on an organization-wide basis in an organization that has dozens of product lines and hundreds of research projects and that will soon have 30,000 employees?

If you were the new CEO at Google, what would you do?