Silicon Valley's Week of Shake-Ups

Silicon Valley had a few big shake-ups this week, with Google's chief Eric Schmidt stepping down for co-founder Larry Page to man the helm and Apple's CEO and visionary Steve Jobs taking an extended medical leave. Add that Hewlett-Packard is bringing on five new board members including former California gubernatorial candidate and eBay chief, Meg Whitman, and it's been a heck of a show. 

Many are speculating that Schmidt has been forced out of his position by Google's two founders, Page and Sergey Brin, who were unhappy about recent company decisions. From the New Yorker:

Schmidt, according to associates, lost some energy and focus after losing the China decision. At the same time, Google was becoming defensive. All of their social-network efforts had faltered. Facebook had replaced them as the hot tech company, the place vital engineers wanted to work. Complaints about Google bureaucracy intensified. Governments around the world were lobbing grenades at Google over privacy, copyright, and size issues. The “don’t be evil” brand was getting tarnished, and the founders were restive. Schmidt started to think of departing.

Schmidt, who has always been good for a controversial soundbyte, seemed to be bringing infamy to the Google . From his cavalier, "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place," to his suggestions that people change their name to avoid being linked to online hijinks, to his shock that Brin's "Don't be evil," mantra was a real corporate mission, perhaps both founders saw a clear need for different leadership.
In essence, Google grew exponentially in Schmidt's 10 years until the little search engine company with parking lot roller hockey games became part of the establishment -- a bloated but profitable corporation where innovation was secondary to the bottom line. Perhaps the co-founders, now both 37, knew it was time to revolt. 

While there were some previous grumblings about Schmidt stepping down after several missteps, few predicted Jobs leaving Apple, medical leave or not. To many, Jobs is Apple and as passionate an evangelist as its entire marketing department -- forget it, I'll even say Jobs is more important than its entire marketing department. No single executive in recent memory has been so synonymous with a company and so proactive in creating media frenzies about its products. (And unlike most company executives, I'd say Jobs is probably the only executive that honestly deserves a multimillion- dollar payout.)

But the 55-year-old Jobs, also a founder of the company, has battled pancreatic cancer in 2004 and had a liver transplant in 2009. This will be his third medical leave. Because he always comes back to Apple, I have a feeling that Jobs will continue to be an active participant in Apple until his health problems or family force him to retire.

As for Apple, as I previously wrote, the company will be fine. Their products and research have been mapped out for years and with or without Jobs, they will continue to be innovative and there will be no "company paralysis" because of his absence.

Will Schmidt and Jobs be out golfing in Pebble Beach? While the two both know and respect each other because Schmidt did serve on Apple's board of directors for three years (until he was forced to resign for conflict of interest) I think Jobs's health is very much at the heart of his leave. Schmidt, 55, while still technically at Google and likely to stay for a complete transition, has been investing in other companies and is probably going to take his $334 million paycheck and await the bidding war for his leadership.
In other news, HP has added five new board members to its board of directors -- one of whom is former California gubernatorial candidate and eBay chief, Meg Whitman, who makes her return to Silicon Valley.
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