There are times when leaders need to lead. And there are times when leaders need to step aside. Google co-founders Larry Page and Sergey Brin just admitted they're in the latter category.
In a letter posted on Google's blog on Tuesday, Brin and Page said they are stepping aside from any management roles at Google and its parent company, Alphabet. Current Google CEO Sundar Pichai will now also serve as the CEO of Alphabet. In his new role, Pichai will continue to manage Google's search and other businesses, as well as the "other bets," including its Fiber business, Nest smart home division, and Google Ventures, among others.
"Sundar brings humility and a deep passion for technology to our users, partners, and our employees every day," the co-founders wrote. "He's worked closely with us for 15 years, through the formation of Alphabet, as CEO of Google, and a member of the Alphabet board of directors. He shares our confidence in the value of the Alphabet structure, and the ability it provides us to tackle big challenges through technology. There is no one that we have relied on more since Alphabet was founded, and no better person to lead Google and Alphabet into the future."
This is an end of an era for Google and Alphabet. Google was founded by Page and Brin in 1998 with hopes of becoming a search engine to tame the early internet. It's now become a business used by billions around the globe for a variety of reasons.
But getting co-founders out of a business to allow others to manage their creations is notoriously difficult. Companies have experienced varying degrees of success offloading their founders.
Apple, for instance, went through troubled times until Steve Jobs returned to right the ship. The company is doing far better now, but some still say that it's Jobs's legacy that keeps it going.
Microsoft had one of the more successful stories after Bill Gates left the company. And under the control of Satya Nadella, it continues to be one of the biggest and most important companies in the industry.
There's no telling what will come of Alphabet with Pichai at the helm, but all signs point to good times ahead. Indeed, in aftermarket trading following the announcement, Google's shares surged. As of this writing, Google's shares are trading at $1,303.74, up from the $1,294.74 they closed at on Tuesday.
During Pichai's time as Google's chief executive, there's been little to complain about from a shareholder perspective. Revenue has skyrocketed, profits are up, and the company's stock value--a key measure for public company CEOs--has more than doubled since Pichai took over. Of course, there have also been privacy concerns, internal culture wars, and other issues.
Ultimately, Page and Brin might have discovered that they're really not as critical to Google and Alphabet's long-term success as they once were.
That's a tough realization for some founders to come to. But it's also a sign of good management. Being humble and realistic enough to know when it's time to move on and let others with the right skill set and temperament run the company is a sign of long-term confidence.
So, even if Brin and Page will remain on as board members and major shareholders, they should be commended for knowing when it was time to step aside. And, ultimately, as long as Pichai can continue to be successful, Google and Alphabet will be better off for it.