Google co-founders step aside as antitrust scrutiny heats up
SAN FRANCISCO - Google’s co-founders are relinquishing their executive positions just as state and federal regulators, not to mention the Department of Justice and Congress, are taking a keen interest in the possible abuse of its privacy practices and market power.
But their long foreshadowed successor, Sundar Pichai, has been well prepped to serve as the public face of the company.
Larry Page and Sergey Brin are stepping down as CEO and president, respectively, of Google parent company Alphabet. The move caps more than two decades during which the pair have shepherded the one-time startup they founded in a Silicon Valley garage. Pichai, who has been Google’s CEO since 2015, will now also head up Alphabet. The company isn’t filling Brin’s position as president.
Google is facing increasing criticism and investigations from authorities in the U.S. and Europe about its privacy practices and the nature of its many-legged business. That will now fall to Pichai to wrangle and push through, though Page might not be totally off the hook.
Democratic presidential candidate Elizabeth Warren, a senator from Massachusetts, tweeted a message aimed at Page on Wednesday: “Quick reminder: We do still expect you to testify before Congress. And changing your title while staying on the board and retaining effective control of it will not exempt you from accountability.”
Page and Brin still hold a majority of voting shares of Alphabet. Each became $1 billion richer Wednesday as Alphabet stock increased more than 2%. According to Forbes magazine, they already had a net worth of more than $50 billion apiece.
Last year, Google raised hackles in Congress by refusing to send Page or Pichai to a hearing on Russian manipulation of internet services to sway U.S. elections. Congressional officials left an empty chair for Page at the witness table; top executives from Facebook and Twitter, meanwhile, turned up to testify. Offended lawmakers derided Google as “arrogant.”
Although longtime tech analyst Tim Bajarin of Creative Strategies said he doesn’t believe Brin and Page are leaving “because the fire is getting hotter,” he said Pichai's role at Google has been preparing him for the increased government scrutiny.
Brin and Page, both 46, have noticeably backed out of the spotlight already. Both stopped making appearances earlier this year at the regular question-and-answer sessions with employees, and Page didn't attend this summer's Alphabet shareholders meeting even though he was still in the CEO role.
Meanwhile, Alphabet has been positioning Pichai as the de facto leader, making him the top executive voice at shareholders meetings and on earnings call. It was Pichai who testified before Congress last December, defending the company against claims from Republicans that the search service is biased against conservatives. Recently, Pichai changed the format of the employee question-and-answer sessions from a weekly occurrence to a monthly one.
The executive shakeup will likely have little impact on the business, analysts from Cowen and Co. wrote in a note Tuesday. They called Pichai’s Alphabet appointment a “formality.”
Pichai assured employees in an internal email that his new job wouldn't mean he was taking a step back from Google.
"I will continue to be very focused on Google and the deep work we’re doing to push the boundaries of computing and build a more helpful Google for everyone,” he wrote.
Pichai, a 47-year-old immigrant from India, has worked at the company for 15 years, serving as a leader in projects to build Google’s Chrome browser and overseeing Android. Pichai, who has an engineering background, took over as the head of Google's products before being promoted to CEO when Alphabet was created in 2015. He is known as a soft-spoken and respected manager.
Alphabet still boasts Google as its central fixture and key moneymaker. But it's also made up of what are known as "other bets," or longshot projects. That includes drone company Wing and self-driving car firm Waymo.
In its early days, Google focused on only one business - cataloging the growing internet. Page and Brin started Google soon after they met as Stanford University graduate students in 1995.
The company has now become one of the most influential companies in the world. Google dominates online search and digital advertising and makes the world’s most widely used operating system for smartphones, Android. It's hard to make it through a whole day without using one of Google's services - ranging from online tools to email, cloud computing systems, phones and smart speaker hardware.
As Google grew, it faced more pressure from privacy advocates over its collection and use of personal information to target advertising. It also has faced allegations that it abuses its dominance in search and online advertising to push out rivals. The company is the subject of numerous inquiries from Congress, the Department of Justice, U.S. state attorneys general and European authorities.
Page and Brin, in announcing the news Tuesday, said the company has "evolved and matured" in the two decades since its founding. Both promised to stay active as board members and shareholders.
Google's longest serving CEO is still Eric Schmidt, the former executive brought into the role in 2001 as a so-called "adult supervisor" for Brin and Page. Schmidt stepped into the position as the company's board worried about the relative inexperience of Brin and Page to manage the growing company. He remained CEO until 2011, when Page once again became chief executive. Schmidt stayed on the board until this year.