NEW YORK/SAN FRANCISCO (Reuters) – Larry Page will need a rare combination of vision and solid management skills when he takes over at Google in April.
One day after Google's surprise announcement that Page would replace Eric Schmidt as chief executive officer, investors and industry insiders are grappling with how the change will affect the world's No.1 Internet search company.
"What's going to change under Larry?" said BGC Partners analyst Colin Gillis, asking the question on the minds of executives from Silicon Valley to New York City.
"In our opinion, Larry is likely to increase investments as a priority. It could be a long-term positive, but short term it's a negative."
The company hopes 38-year-old Page will help streamline decision-making as it tries to deal with tougher competition from Facebook and Twitter.
Within technology circles, the move to replace Eric Schmidt left some wondering if Page can make a successful comeback to the company he helped create during the first dot-com boom. For a list of tech executive departures and hires see: http://r.reuters.com/pyh67r
"Founder becoming CEO ... Is this like a Steve Jobs returning or a Jerry Yang returning?" tweeted Chris Dixon, a technology veteran who has invested in Skype and Foursquare.
Steve Jobs returned to Apple Inc in the 1990s to save the company he founded. Yahoo Inc's Jerry Yang made a similar comeback, returning to his Internet company during a troubled stretch, but failed to restore its fortunes.
"It is important to note that, although the titles have changed, the core team remains the same ... this new team structure makes a lot of sense and could result in faster decision making," JP Morgan analysts led by Imran Khan said.
Some analysts believe Google's stock could gain another 20 percent from current levels.
Brokerage UBS said it was bullish on Google's long-term prospects and expects the company's focus on its emerging display network business, YouTube, Android and enterprise customers to deliver healthy returns in 2011.
Fourth-quarter operating margins were slightly weaker than expected at 53 percent on higher sales and marketing expenses.
JP Morgan's Khan, who lowered his 2011 operating margin estimates by less than a percentage point to 52.4 percent, said the expenses are necessary to promote future growth.
Evercore Partners, however, said it was still concerned about Facebook's growth trajectory and deepening integration with third party sites. Investors have speculated Facebook could cut into Google's business if advertisers shift to the social network.
Google Inc shares -- which gained 2 percent following Thursday's better-than-expected quarterly results and the announcement of the CEO change -- finished Friday's regular trading session 2.4 percent down at $611.83. The shares of Mountain View, California-based Google have risen 16 percent since Google reported third-quarter results mid-October and are up almost 45 percent from its 52-week low of $433.63 touched in July 2010.
(Reporting by Paul Thomasch in New York, Alexei Oreskovic in San Francisco and Sayantani Ghosh and Mary Meyase in Bangalore; editing by Joyjeet Das, Phil Berlowitz and Andre Grenon)
No comments:
Post a Comment