March 28, 2024

Google’s Chief Works to Trim a Bloated Ship

Mr. Page has never been more impatient than he is now. He is on an urgent mission to pull Google through a midlife crisis that threatens to knock it off its perch as the coolest company in Silicon Valley.

Founded in 1998, Google is not yet 15, but in tech years, it is an aging giant that moves a lot slower than it did when it was a hot start-up. It is losing employees to the new, hotter start-ups, and is being pushed around by government regulators and competitors like Facebook, Apple and Amazon, which are all vying for people’s online time.

So Mr. Page, Google’s co-founder and former chief executive, who returned to the top job in April, is making changes large and small. He dropped more than 25 projects, saying they were not popular enough. He masterminded Google’s biggest deal by billions, the $12.5 billion Motorola Mobility bid, a bold move that positions the company to enter the hardware business.

Borrowing from the playbooks of executives like Steven P. Jobs and Mayor Michael R. Bloomberg, he has put his personal imprint on the corporate culture, from discouraging excessive use of e-mail to embracing quick, unilateral decision-making — by him, if need be.

“Ever since taking over as C.E.O., I have focused much of my energy on increasing Google’s velocity and execution, and we’re beginning to see results,” Mr. Page, 38, told analysts recently.

Naysayers fret that in his rush to refocus the company, and especially in ending projects, he risks squelching Google’s trademark innovation, which bubbles up when engineers are given the time to experiment. “He’s going to lose some people at the end of the day,” said one employee who, like others, agreed to speak only anonymously because the company bars them from talking to the press without prior approval.

“He’s certainly been active,” said Mark Mahaney, an analyst covering Google at Citigroup. “Whether he’ll be active and successful, we don’t know.”

His new responsibilities have changed Mr. Page, an engineer by training and personality. Judging by his few public appearances, he has learned to talk the corporate talk to shareholders and analysts, though he still generally declines to speak to the press, including for this article.

He even broke down and hired an administrative assistant, after letting his previous one go years ago. She schedules him for those dreaded meetings. But they are only 50 minutes long, because in one of his first companywide memos after he took the job, he decreed that hourlong meetings must allow time for a bathroom break in between.

Despite the many external pressures on Google, it is dominant in its business and highly profitable. But, when asked at a recent conference about the biggest threat to his company, Mr. Page answered in one word, “Google.”

The problem was that the company had ballooned so quickly — it now has more than 31,000 employees and $27.3 billion in revenue so far this year — that it had become sclerotic. A triumvirate of Mr. Page, his co-founder, Sergey Brin, and Eric E. Schmidt, Google’s former chief and current chairman, had to agree before anything could be done. The unwieldy management and glacial pace of decision-making were particularly noticeable in the Valley, where start-ups overtake behemoths in months.

It is different now.

“It’s much more of a style like Steve Jobs than the three-headed monster that Google was,” said a former Google executive who has spoken with current executives about the changes and spoke anonymously to preserve business relationships. “When Eric was there, you’d walk into a product meeting or a senior staff meeting, and everyone got to weigh in on every decision. Larry is much more willing to make an O.K. decision and make it now, rather than a perfect decision later.”

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Anticipated Amazon Tablet to Take Aim at Apple iPad

But neither Samsung nor Motorola nor Acer could beg or borrow any of Apple’s magic. Research in Motion, the maker of the BlackBerry, said it shipped only 200,000 of its PlayBooks in three months — about what Apple sells in three days. Hewlett-Packard, which flopped this summer with the TouchPad, was the latest to get burned.

Now comes a final competitor, the best-placed challenger of all: Amazon.com. The retailer is on the verge of introducing its own tablet, analysts predict, a souped-up color version of its Kindle e-reader that will undercut the iPad in price and aim to steal away a couple of million in unit sales by Christmas.

A competition between Amazon and Apple tablets will be a battle that pits the company that created the first popular e-reader (and set off a still-unfolding revolution in how books are consumed) against the company that created the first popular tablet (and set off a revolution in progress about how entertainment and other media are consumed).

Both companies are riding high, racking up record revenues and seeing their stock market valuations cruise to new peaks. Each has ample resources to enjoy a pitched struggle for people’s attention and their wallets.

Whichever company triumphs, said the Barclays analyst Anthony DiClemente, “the consumer is going to be the winner.”

“The fact that Amazon is making such a huge investment might make Apple come back into the market at a lower price point,” he suggested. “What’s to prevent them from slimming down the iPad?”

Most tech companies like to keep their cards close to their vests, but Amazon, like Apple, strives to render the whole deck invisible. It has, though, scheduled a news conference in Manhattan on Wednesday, and the speculation on technology blogs and among analysts is that the tablet will be unveiled.

The original Kindle was not introduced until Nov. 19, 2007, which was rather late in the holiday season. It immediately went out of stock for five months. Amazon perhaps is learning from its mistakes.

The Amazon tablet, analysts believe, will most likely sell for about $250, half the price of the basic iPad. Its screen will be seven inches as opposed to the iPad’s 10 inches. Unlike the current Kindle but like the iPad and iPhone, it will operate by touch. A second tablet, with a bigger screen, is expected next year.

The competition will be asymmetrical. Apple sells movies, music and books in order to sell devices. Amazon sells devices in order to sell books, movies and music. Apple has never faced an opponent with such a vastly different strategy. Apple declined to comment on its strategy against Amazon.

Few if any analysts expect Apple to seriously stumble, but that is not to say it will emerge unscathed. The Amazon tablet might be underpowered when set against the iPad, a Corolla to Apple’s Lexus, but that might not matter.

“The No. 1 thing consumers do on tablets is e-mail,” said Sarah Rotman Epps, a Forrester analyst. “The No. 2 thing is look up stuff on the Web. Then playing games and watching video. Amazon will offer all the tablet that many consumers need.” She estimated initial sales of as many as five million devices.

Amazon’s willingness to sell the Kindle e-reader at a loss — it dropped to $114 from $399 in less than four years — will doubtless be duplicated with its tablets. By concentrating on direct sales from its own Web site, Amazon does not have to share margins with another store.

All that makes Amazon “a nasty competitor,” Ms. Epps wrote in a recent report, and leaves Apple vulnerable among those who want a tablet solely for entertainment and not for professional uses. Since that is about two-thirds of tablet users, Apple’s product strategists will finally have to take a competitor seriously, she concluded.

Apple is not the only vulnerable one. The Amazon tablet will sell for the same price and offer many of the same things as Barnes Noble’s successful color Nook e-reader. The once-mighty book retailer is staking its future on making the transformation to digital; otherwise it will end up like its one-time competitor Borders, now vanquished.

Amazon has 52 percent of the e-reader market against 21 percent for Barnes Noble, according to the data firm IDC. A small harbinger of the cutthroat struggle between the two booksellers came this summer in the unlikely form of a best-selling German historical novel, “The Hangman’s Daughter” by Oliver Potzsch.

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Amazon to Sell the Kindle Reader at a Lower Price, but With Advertising Added

SAN FRANCISCO — Amazon is shaving another $25 off the price of its Kindle e-reader, this time with the help of advertisers.

The newest Kindle is $114. Amazon will sell its e-book reader at the lower price by showing ads as screen savers and at the bottom of the home screen, and by selling special offers, similar to Groupon and other daily deal sites.

The ads are the latest step in Amazon’s transition from e-commerce retailer to full-fledged digital media company. By selling ads that will show up next to digital content, Amazon is laying further groundwork that could enable it to someday sell tablet computers that would compete with Apple and Google Android tablets.

Amazon is also showing how far it is willing to go to remain a front-runner in the e-reader price wars. The new Kindle is $35 less than Barnes Noble’s least expensive Nook and $66 less than Sony’s least expensive Reader. It is also several hundred dollars cheaper than an Apple iPad.

“This is really about having a Kindle that’s more affordable,” said Jay Marine, director of Kindle at Amazon.

The device, known as “Kindle with Special Offers,” will have the same hardware as the most recent, $139 Kindle, with Wi-Fi, a one-month battery life and an 8.5-ounce body. But instead of the typical Kindle screen savers, like images of authors, Amazon will show ads from brands like Buick, Procter Gamble and Visa. The ads will also show up on the home screen, but they will not appear inside e-books.

Amazon will give users a say in which ads they see, borrowing a page from the playbooks of Hulu and TED.com. People can vote, either online or on a Kindle app called AdMash, for their favorite of two ads, like a close-up of a model’s face versus a photo of a jar of cream for Olay. They can also tell Amazon whether they want to see more or fewer ads with landscapes or illustrations, for instance.

Readers will also be able to get discounts through their Kindles. Amazon will open the offers to advertisers, but to start, the deals are all from its site, like $10 for a $20 Amazon.com gift card or 50 percent off a Roku streaming player from Amazon. By entering the daily deal business, Amazon is competing with Groupon and with LivingSocial, the group-buying service in which it is an investor. Mr. Marine said that Amazon’s service was separate from LivingSocial’s.

The ads and offers appear to be another significant step toward Amazon building its own tablet and competing more directly with the iPad, said James L. McQuivey, an analyst at Forrester Research who studies digital media and consumer electronics. Amazon opened an Android app store last month and has been hiring Android software developers.

An Amazon tablet could tie together the seemingly disparate parts of the company’s business, Mr. McQuivey said, including e-commerce, e-books, video and audio.

“I can so easily see them selling a tablet in the future at a dramatically reduced price,” he said. “To me, this is a way for them to test that out and to start talking to advertisers.”

When asked whether the new Kindle was a move toward a tablet, Mr. Marine said, “I don’t want to speculate.” He also declined to say when the Kindle would have a color or touch screen, both elements of the Apple iPad and Android tablets made by Motorola, Samsung and others.

By incorporating ads in the Kindle operating system — as screen savers and in the menu, where readers will find the list of offers — Amazon is also creating a new kind of ad that could be used for new business models. Publishers, who have been searching for new ways to market e-books to replace intriguing covers and bookstore displays, could give away sponsored e-books. Amazon could also build a group-buying service among Kindle owners.

Buick’s Kindle ads will show photographs of four of its cars and text that relates to reading, like a reference to a car owner’s manual, said Craig Bierley, director of advertising and promotions for General Motors’s Buick division. Because reading books is an intimate experience, he said he hoped people might pay more attention to the ads.

“The Kindle for many people is really a centerpiece of their entertainment, so their level of engagement with the device, and hopefully with the advertisers on it, will be higher,” Mr. Bierley said.

That type of engagement is the holy grail in advertising these days, said Bobby Calder, chairman of the marketing department at Northwestern’s Kellogg School of Management. Still, books are one of the last ad-free zones, and by showing ads on an e-reader, Amazon risks alienating some users, he said.

“There’s been research that shows that if you put an ad in an environment where people are highly engaged, that kind of intrusiveness can really backfire,” he said.

People could buy the less expensive Kindle and then avoid the ads by turning off Wi-Fi. Mr. Marine said Amazon did not think customers would do that because they would value the offers on the new Kindle, which is now available for order and expected to ship May 3.

“We think the response is going to be really positive because it doesn’t touch the reading experience,” he said.

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