An Open Letter to Google CEO Larry Page

To: Larry Page, CEO, Google

From: Steve Tobak, The Corner Office blog, BNET

Re: Google's Strategy

Dear Mr. Page,

You've been Google's chief for all of 11 days and the stock suffered its biggest single-day drop in years. Well, Akio Toyoda had only been running the company for 8 months when Toyota faced the biggest crisis in its 70 year history. I think he handled that pretty well, don't you?

Anyway, you don't seem to sweat that sort of thing and you shouldn't. Stocks go up and down. There's really no point obsessing about it. Sure, it's a gage of investor sentiment, but the word on the street is that you could give a crap about Wall Street and what shareholders think. That's what you have a CFO for, right?

From a leadership perspective, the only thing that really matters is that you set the overall vision and strategy for the company - one that captures its unique value proposition and how it intends to continue to deliver that value to customers, going forward - and communicate that to key stakeholders, right?

Oh, wait. You actually haven't done that yet. Not to worry. New CEOs usually get 100 days or so to figure out what they've got. Some may expect an accelerated timeline since you've been part of the triad that runs the company since day one and you sort of hit the ground running with that management shuffle a few days ago.

In any case, sooner is definitely better than later on the strategy thing. It may be age-old wisdom, but it's true, nonetheless: it's hard to get anywhere unless you know where you're going and have some idea of how you're going to get there.

Which brings us to why I'm writing. Just as software's your thing, strategy is my thing. Sure, I do some writing too, but frankly, it's not that hard to stand out among the legion of content mills that turn out tons of garbage tuned to Google's search algorithms to generate ad clicks. But I digress.

Your time is precious so let's get down to business. Google's a rocket ship with high expectations for its continued growth and success. Like it or not, Thursday's earnings spooked a lot of people, and not just shareholders, either. I can see why. When it comes to your strategy for the company going forward, there are far more questions than answers. And that's never a good thing.

Here's what I think are the big hairy issues, unanswered questions, and serious concerns facing you as Google's new chief:

• Did fiscal responsibility leave the building with Eric Schmidt? Yeah, I know, he's still around as chairman. Well, call me skeptical about how engaged he ends up being. And something tells me you're not the type to listen. After all, he had ten years; now it's your turn, right? I could be wrong about that, but I doubt it.
• Your reorganization included dumping product chief Jonathan Rosenberg and promoting seven business heads to report directly to you. Well, that's seven hungry mouths to feed, i.e. resource-hungry businesses, most of which aren't likely to be anywhere near as profitable as Google's core search advertising business. No wonder expenses have gone through the roof.
• According to your website, one of the "Ten things we know to be true" is "It's best to do one thing really, really well." I couldn't agree more. But the problem with an advertising business model is that, over time, eyeballs and clicks become more and more expensive to find. And Bing is gaining market share. That's why diversification is so important. Just look at how hard and expensive it's been for Microsoft and Intel to gain traction beyond their core market. It's a real mess.
• That said, without a clear vision and strategy for the company, diversification is likely to be a ridiculously expensive free-for-all in highly competitive markets dominated by entrenched and powerful incumbents. So far, Google's diversification strategy appears to be chasing Apple in mobile, Facebook in social media, Microsoft in web browsing and operating systems, Amazon in retail, and pretty much everyone in the cloud.
• Not to bring up an ugly subject, but when Yahoo made Jerry Yang CEO, everyone talked about how he's such a brilliant visionary. Ironically, he never delivered on that. He did, however, manage to botch just about everything he touched. Not that comparisons to Yang are appropriate here, but it's certainly the elephant in the room and, well, on second thought, let's not even go there.
• How about Thursday's earnings call? The Wall Street Journal counted six times in your two and a half minutes on the call when you said you were either "really excited" (three times), "very excited, "very, very excited," or "tremendously excited." Just so you know, being excited is not a strategy. On the call, CFO Patrick Pitchette said, "... the company will continue to have the same overall strategy -- putting technology and customers first." That's not a strategy either. Not even a little.
• Your website says "Google's mission is to organize the world's information and make it universally accessible and useful." That's actually pretty good as missions go, but it's sort of broad, if you ask me. So, while it does encompass all your key initiatives, it also puts you in head-to-head competition with all those big companies we talked about earlier. You know, the biggest tech companies on the planet that also happen to be wildly successful in their core businesses. That, to me, is one big, hairy issue.

Well, at least that's pretty straightforward. If I've learned anything after 30 years in the business, it's that this stuff is really, really hard. That's why they pay executives like you and consultants like me big bucks. To figure it out. Anybody who sends you five bullets of advice on strategy in 500 words or less, with all due respect, is an idiot.

So, if I've accomplished anything with this letter, it's to get across that, if you think you've got a strategy for Google, you actually don't. Also, be sure to let us all know when you do. You see, great leaders have a clear vision and strategy. They also share it with their stakeholders. And since we're all pretty much Google customers, do us all a favor: don't make us search for it.

Best of luck in your new job. It's exciting; I know.

Sincerely,

Steve Tobak
The Corner Office blog, BNET

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