Six large org groups, run as individual companies, individual budgets, divided by product and all reporting to the CEO - exactly how Microsoft is structured.
According to dr. christian wentz, the organizational structure of many large innovative companies (Toyota, Procter & Gamble, GE, 3M, IBM, Google, Microsoft, Sony, Hewlett-Packard, DuPont, Honeywell and Whirlpool) , followed certain rules: [1]
1. Delegation of Decisions to Innovation Teams
2. Integration of R&D into the Business Units
3. Co-Location of Teams and Departments
4. Central Innovation Teams
5. Central Innovation Funds
7. Merger & Acquisition Department
Google's recent move is just options 1,2 in this list. nothing special , just a common practice in their situation.
Which lead to turf war, and over half the org heads were let go over the past 2 years (Ozzie, Allchin, Allard, Raikes, also Bach and Moore)
Google is now also structured as a tech conglomerate, there aren't many of those. It is something that Microsoft went through 20 years ago (ie. going from a one-product company to something more).
There are many parallels, just hope Google learnt something from the Microsoft experience of structuring and management.
The majority of that is search revenue, so it is booked in the other org. Android books marketplace revenue, which will eventually be a billion dollar business but not yet.
Chrome is also profitable because of search revenue, although I haven't seen a figure anywhere
The difference between GOOG and MSFT in these situations is pretty heavy. Yes, one product is supporting four or five in terms of profits. But there's a key factor that you're missing.
Does uptake in online services increase profit in Office or Windows? Does uptake in Entertainment and Devices increase the profit of Server and Tools? (Tools, perhaps, in terms of IDEs).
The key difference is this: all of GOOG's non-ad products are loss leaders. They increase internet usage - specifically, internet usage on pages that run GOOG ads. As long as their loss leaders increase the profit of their main product, they win.
Investments in Google's side products (email, maps, etc) create a feedback loop, putting more eyeballs in front of their profit machine (ads). They really are in the best position - the more people that use the internet, the more money they make. That's why they're so keen on doing things 'pro bono' - like their fiber initiative, and Android.
Google is kind of the Microsoft of our generation. I'm sure in a few years people will be calling to have some part of Google separated from another part of Google.
Maybe Google in 2011 was like Microsoft in 1995 - Just finished building a product that takes all the market share (Search/Android & Office/Win95), stock having increased by 500% over the past 5 years, and about to enter a tech bubble.
That isn't a list of all of the orgs, it's a list of all of the promotions. Marissa Mayer isn't under any of those people, she just didn't get promotion (having already gotten one recently). She's over location.
I think this will be a really good move for Google and has been a long time coming. Up until now, the SVPs all had quite a bit of autonomy but were still burdened by their reporting structure and the friction caused occasionally when team mandates overlapped. This divisional structure effectively flattens the org by allowing product managers and engineers to get things done at the SVP level w/o any other burdens.
I think the challenge will be to see how hands off Larry can be with the SVPs. He has a natural interest in getting deeply involved in some projects, and that could be a source of additional overhead.
Most mysterious to me is what is Sergey doing right now? Larry's getting all the attention, but it seems like Sergey's just lying low.
>Most mysterious to me is what is Sergey doing right now?
According to the article he is "focused on major strategic initiatives"
>Page and fellow Google co-founder Sergey Brin, who is focused on major strategic initiatives, have offices next to each other in a recently renovated building on the campus. They are down the hall from executive chairman Eric Schmidt and surrounded by engineers working at key products for Google.
Where Does Gmail live now? Google Docs? If they are lumped together in "social" then that division would seem to be much less focused than the others. And perhaps misnamed.
That isn't like Google at all. Apple is divided up by function, Google is divided up by product. So the Android team has it's own designers, as does Chrome and Search. Whereas at Apple the same design team works on all the products.
Apple's functional structure sounds like a good way to maintain consistency across product designs and nimbleness of corporate strategy.
Google's (and Microsoft's) product-oriented structure sounds like a good way to have fragment product designs and strategies and create political fiefdoms. "The Innovator's Dilemma" suggests that by placing too great an emphasis on satisfying customers' current needs (with existing products), companies fail to adapt or adopt new technology that will meet customers' unstated or future needs.
So, "The idea is to empower people, let them take risks and give them more authority over decisions," and yet, "The reorganization also puts Page firmly in charge of Google and its performance in much the same way Steve Jobs runs Apple.". So Page is trying to give people autonomy while also becoming a dictator? Those are two very different philosophies there.
Having people report to one person usually empowers them more than having them report to a committee. It also ensures 'vision control' in a much better way. So yes, and no, they're not at all different or incompatible.
Organisation grows when its people grow. The freedom to take risks, make their own decisions would bring in a fresh look into how things are built & run. But I hope each one of these have good level of stake & passion comparable to the founders.
This new organizational structure almost assures that they will continue to compete with themselves in the tablet OS space. Chrome OS vs Android will be an interesting battle.
A couple of days ago, on another story, I mentioned that I thought the coming reorg would be to change to more product-focused organizations: <http://news.ycombinator.com/item?id=2411933>;
"Not even smaller operating units, it just sounds like things will be organized according to product rather than function. Other HN articles recently have mentioned how Google has a bunch of centralized organizations that report all the way to the top and are not responsible to any product group (Launch, Site Reliability, UX, Product Management, etc).
What's different about Android is not that Andy Rubin has an engineering background; many of Google's senior managers do, even in the big functional orgs. What's different is that Android is a product unit which largely does not depend on these external functional teams and has all its resources built in."
