Google: 'Adult supervision' no longer needed
Predictably, Google reported impressive financial results for the fourth quarter, but what drew the most headlines yesterday was something outgoing CEO Eric Schmidt summed up in a tweet: "Day-to-day adult supervision no longer needed!"
Schmidt, along with Google co-founders Larry Page and Sergey Brin, briefly joined at the start of Google's earnings conference call to explain what's up. That is, Page is moving into the day-to-day operations as CEO starting April 4, and Schmidt will assume the role of executive chairman. Brin's title is co-founder, and he's going to work on new products that he finds fun and interesting.
Besides clarifying who's doing what, Schmidt said the new structure should speed decision-making. Schmidt has served as CEO for 10 years – a long time for any CEO. As executive chairman, he will focus externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership.
Google shares were up slightly in after-hours trading, so the market seemed to be OK with the news. In early morning trading today, shares were up just over 1 percent, at $634.35.
GAAP net income in the fourth quarter was $2.54 billion compared with $1.97 billion in the fourth quarter of 2009. Revenues totaled $8.44 billion, representing a 26 percent increase over fourth quarter 2009 revenues of $6.67 billion. Google ended the quarter with 24,400 full-time employees, up from 23,331 at the end of September.
Schmidt said during the call that for the past decade, the triumvirate has been making the decisions, and they will continue to do so. He also said he's become great friends with Page and Brin – they're all computer scientists and have a lot in common.
After taking a few questions, the trio left the call, and the usual gang kept the call going, with CFO Patrick Pichette, Senior Vice President of Product Management Jonathan Rosenberg and President/Global Sales Operations and Business Development Nikesh Arora going over financials and taking questions.
They didn't share a whole lot of mobile-specific numbers like they did in the last conference call, when they said people who are accessing its products and services through mobile phones are adding $1 billion annually to Google's existing revenue streams. Rosenberg mentioned that NFC is important to the company, and reiterated that 300,000 Android activations are happening every day.
Regarding Schmidt's tweet, The Wall Street Journal's Venture Capital Dispatch suggested the comment may have been referring to a Charlie Rose interview from years ago, when the two twenty-something founders of the company were asked about bringing Schmidt in to manage things. The subject became a light-hearted talking point for the two.
In a recent article for Harvard Business Review , Schmidt said Google's strategic initiatives in 2011 are all about mobile, and it needs to do some serious spadework on three fronts. Those fronts include focusing on the underlying fast networks, attending to the development of mobile money – phones are used as banks in many poorer parts of the world – and increasing the availability of inexpensive smartphones in the poorest parts of the world.