Eric Schmidt, the former Novell CEO that Google hired 17 years ago to bring adult supervision to the company is stepping down from his role as executive chairman of Google parent Alphabet.
Starting January 2018, Schmidt will transition to the role of technical advisor at Alphabet. He will however, continue as a member of Alphabet's board of directors. Alphabet's Board will most likely appoint a non-executive chairman in place of Schmidt.
Alphabet announced the move Dec. 21 without offering any explanation for it. “Larry, Sergey, Sundar and I all believe that the time is right in Alphabet’s evolution for this transition," Schmidt said in a prepared statement, referring to Google's founders and its current CEO.
"The Alphabet structure is working well and Google and the Other Bets are thriving,” said Schmidt said.
Alphabet CEO Larry Page lauded Schmidt's contributions at Google over his nearly 17 years of service at the company and noted that Schmidt would help as an advisor on science and technology issues going forward. "I’m incredibly excited about the progress our companies are making and about the strong leaders who are driving that innovation.”
Schmidt's departure from the helm of a company he helped build into an international technology giant is as sudden as it was unexpected. Many in the industry credit him with playing an important role in transforming Google from a brash young start-up to a global behemoth that some have actually come to fear for its market domination.
Schmidt was hired as CEO of Google in 2001 shortly after the dotcom bubble had burst and Google itself was a 200-person company whose search engine averaged around 100 million searches per day. In contrast, the company today has over 61,000 employees and some 3.5 billion searches are conducted on Google Search every single day translating to a mind-boggling 1.2 trillion searches annually.
In an interview shortly after Schmidt was hired, Google co-founders Page and Sergey Brin were asked why they had recruited an outsider to run their company.
"Parental supervision, to be honest," Brin had quipped. "As much as we had done things right we are passed the stage when we were rebellious," he had noted. With Google growing to a point where its search engine had a global reach, it was time to bring in an experienced executive to helped out, Brin had said. "That's pretty reasonable."
Nearly 17 years later, that decision appears to have paid off. After serving as CEO till 2011, Schmidt continued as an executive chairman at Google and has served as a trusted advisor to Brin and Page.
During Schmidt's run at the company Page and Brin have matured and so has Google, said Charles King, principal analyst at Pund-IT Inc. "At a certain point, promising technology start-ups require an experienced, technically astute executive to mentor their business evolution," he said. "You could call it 'having an adult in the room'," he said.
It is a practice that many current generation fast-growing startups such as Uber, which has gotten into all sorts of legal trouble, would do well to emulate, he said.
Schmidt's long run at Sun Microsystems and his time as Novell's CEO provided exactly the sort of technical and business experience that Google required in 2001, King said.
"Since then, Schmidt has helped guided the company through an evolution that has resulted in remarkable success that also largely preserved Google's original intent and spirit," King said. "Schmidt is one of the better or even best examples of a traditional Silicon Valley business dynamic."
Alphabet has not said by when it hopes to appoint a successor to Schmidt.