The reason Eric Schmidt got fired

Update: I’ve been thinking about this post (for obvious reasons to me: which I won’t share) and I feel pretty good about Google’s future. Why? Because they create amazing tools. Those tools can be the social object for all the web to share and talk about. Product focus is the best focus. Given this, I’m sure that Larry and Sergey can successfully lead Google into the future.

As most of you know by now Eric Schmidt of Google has been relieved of command, as of this April. The reason; Google is losing. “The hell!”, you say, but it’s the truth. Yes, they just made 28 trillion dollars this past quarter but a CEO’s job is not about today it’s about tomorrow and Mr. Schmidt, knew his day was coming as Facebook begins to bite into the future of Google. Google has tried several times to reinvent themselves as a social company (Google Buzz) and through acquisition, but to no avail. (Okrut is losing market share everywhere and over 1/4th  of all people online have a Facebook account.) Facebook generated $2 billion this past year from advertising and when they introduce a much improved search (hopefully soon), Facebook will be able to offer search based ads and improved PPC campaigns to compete directly with Google. Well not exactly directly. Facebook has a distinct advantage. 33% of all people online in the US are on Facebook and this past year traffic to Facebook surpassed Google. The default state of the Internet is quickly becoming social (and mobile), while Google slowly turns into a utility like electricity for your home. Something you need, but no real growth potential except through acquisition and we all know how their recent attempts to acquire Yelp and Groupon have gone.

There are several other contributing factors I’ve posted about. The future of search is a three layered cake and Information Technology Strategy: Class 4 – Facebook will own the universe. I believe what I’ve posted about will happen. The real question is; is search so ingrained, in a behavioral sense, that people won’t think of Facebook when it comes to search? I would say that yes. Most people won’t think of Facebook when it comes to search (Google’s a verb after all). But if Facebook is right in front of their face all day (peak Facebook usage is during work hours) then maybe they will.  We’ll see.

Mr. Schmidt, will be staying on with Google in a lesser capacity and co-founder, Larry Page will be taking over?!?!?!?!??!?!? Uh. Okay. What does coding PageRank have to do with successfully running an online business. That’s right. The answer rhymes with ‘smuthing’ and starts with an ‘n’. Google made money because of Eric Schmidt and Cheryl Sandberg (who now works for Facebook). I see a very bumpy road ahead for Google in regards to innovation. Again; we’ll see.