Did the China decision mark the beginning of the end for Eric Schmidt?

January 23, 2011: 2:37 PM ET

It seems that the move may not have only ended Google's presence in China, but also Schmidt's tenure.

In a piece in the New Yorker, Googled Author Ken Auletta argues that the decision to pull Google (GOOG)  out of China was the turning point  for outgoing CEO Eric Schmidt in his decision to step down from the company's Chief Executive role.

According to close advisors, the Google C.E.O. was upset a year ago when co-founder Larry Page sided with his founding partner, Sergey Brin, to withdraw censored searches from China. Schmidt did not hide his belief that Google should stay in the world's largest consumer marketplace.


Nudged by a board-member friend and an outside advisor that he had to re-energize himself, he decided after Labor Day that he could reboot.

He couldn't. By the end of the year, he was ready to jump on his own.

Ultimately the fact that Schmidt was not making the tough decisions was demotivating.

By most accounts, the three Larry Page, Sergey Brin and Schmidt often agree, but when they don't Schmidt finds himself on opposing sides of Brin and Page is the tie breaker.  It makes sense, then, that Page takes the helm as he was the one that ultimately decided which direction to take Google.  Brin is also taking a back seat of sorts, moving into projects he's "personally passionate about", not necessarily at Google.

Auletta also indicates that Schmidt's role as Chairman might not be a permanent one, but one that will be a year long transition as Schmidt looks for other roles outside the company.  Indeed, Schmidt announces a plan to take a pretty big stock payout which seems to indicate a departure is in the works.

Incidentally, Auletta's book is being made into a movie, one which will now have a major plot turn.

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Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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