A couple days ago, Google CEO Eric Schmidt announced that he was handing the company's reins back to Larry and Sergey.
Commentators have been focused on the wrong things. There has been a lot of discussion of Larry's new role as CEO. I think the important issue is Sergey's new role in all this.
Bill Saporito, blogging on Time.com, sees trouble. He thinks Google has become too big to be run as a "geek commune" any more. He thinks it may be a bad time to get rid of Schmidt's "adult supervision." Given the fact that the company is having trouble in social networking and its Chrome operating system, he writes, "It's possible that Google doesn't need a guy who can invent the whip -- it needs a guy who can crack the whip."
By contrast, Claire Cain Miller and Miguel Helft at the New York Times write that this is an attempt to revive its "start-up spark."
The Times is closer to the truth, but not because Schmidt is out and Page is in. The important change is Sergey Brin's new job.
According to Schmidt's blog, "Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be Co-Founder."
Aren't the Chrome OS (which will run any iPad competitor Google will push,) social networking and Google TV (which has been struggling to gain momentum) just the kind of strategic products that Sergey will now head?
It used to be that Sergey focused on new technology, Larry headed new products and Schmidt ran the company's financial operations. But those roles were all somewhat fuzzy when the company was run by a triumvirate. All three had to make strategic decisions together. Now it's clear who is doing what.
Larry has the job of running the basic business of the company. He still has Schmidt as an advisor, and there are plenty of financial folks to help as well. And don't forget: financially, Google is doing fine. Larry just believes he's mature enough to run a company now, and Eric agrees.
But new product development has been spotty and disorganized. So the most important product and technology development is now focused under Sergey. By dedicating all his attention on important new products, he may be able to get them out the door faster, with smaller teams and better coordination.
Why the change with Schmidt? Who knows? But he has nothing to prove any more. He's wealthy and successful. Maybe he wanted to back off, or maybe Larry wanted the top job now that the VCs can't make him have adult supervision.
But I think what Schmidt says in the blog is, in fact, the main reason. "Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making." This change looks like it may do just that.