Google’s announcement yesterday that co-founder Larry Page would return as CEO caught the tech world by surprise. Mostly because that’s usually what a company does when it’s in trouble — and Google hardly needs saving.Still, it’s hardly an unusual move. Restoring power to a founder has shown itself to be an effective way at kicking the company into a higher gear, or transitioning to new long-term leadership.
Perhaps the most successful story is Steve Jobs at Apple, who rescued Apple from the grave and turned it into the world’s top tech brand.
But this strategy has also flopped in the past: You need look no further than Yahoo’s Jerry Yang, who wasn’t much better than Terry Semel before him, or Dell’s Michael Dell, who hasn’t been able to chase down HP, and is getting his butt kicked by Apple in key growth areas.
OK, Google doesn't actually need saving. But it needs a kick in the pants, more focus, and it needs to move faster. Facebook and Apple are not going away, and Google is at risk of becoming the next Microsoft.
Maybe Larry Page will be able to speed things up again at the Googleplex.
Apple is arguably the best turnaround story in the history of business. Steve Jobs, who got canned in the mid-1980s, came back in the late-90s to save Apple.
Jobs refocused the company, trimmed the fat, and started launching products like the iMac and iPod that would drive massive growth.
Apple just posted its best quarter ever, earning 6 billion of profit on more than $26 billion in sales. And its stock price has multiplied more than 80X since early 1997, when Apple closed its acquisition of Jobs' NeXT Software.
Michael Dell came back in January, 2007, after HP had kicked Dell's butt down to being no. 2 in the PC industry.
'I am enthusiastic about Dell 2.0,' he said in a press release announcing his new position. But he hasn't been able to do much.
Dell is still no. 2 after HP, according to the latest IDC stats. It is still heavily dependent on Microsoft Windows, as rival HP tries to diversify with its new Palm WebOS.
And Dell is nowhere in mobile and tablets, the future of the personal computing industry. We bet Mr. Dell would have laughed in 2007 if you'd told him that Apple would be destroying him in two key growth areas.
In Dell's most recently reported quarter, it earned ~$800 million on $15 billion of sales.
Schultz came back after Starbucks stores had started to feel too much like McDonalds.
Recently, the company has focused on trying to grow business beyond the espresso bar, including food, non-coffee drinks like smoothies, and VIA instant coffee. And Starbucks continues to focus on international growth, including plans to have 1,500 stores in mainland China by 2015, up from 400 now.
Growth isn't nearly what it once was, but shares are up almost 70% since Schultz came back, far outpacing the broader market.
No one thought that Jerry Yang, one of Yahoo's founders, could have been a worse CEO than Terry Semel, the guy before him. Whoops!
Yang famously blew the Microsoft deal, then fired himself, and now Carol Bartz is in charge. Yahoo shares trade at $16, less than half of the ~$33 per share Microsoft had offered Yahoo.
OpenDNS founder David Ulevitch took back the CEO reins in December, 2009, replacing ex-VMWare exec Nand Mulchandani, who had replaced Ulevitch the year before.
Last year, Ulevitch raised $4.5 million from two of Silicon Valley's top VC firms, Sequoia Capital and Greylock Partners, launching its first big growth push.
Schwab had been flailing, facing new competition from E-Trade and Ameritrade, so founder Charles Schwab came back to fix the company. Shares have more than doubled since then, outpacing the broader market.
Chuck kicked himself upstairs to Executive Chairman in 2008, with Walter Bettinger taking over as CEO.