As everyone can tell from the picture on the left, Eric Schmidt appears to be your standard executive, maybe even a trendy one, based on the very trendy pink shirt he sported for this picture. But is he really as good as is being suggested? It’s difficult to speculate the true worth of any CEO, at least in my opinion, without having access to those that work closely with the position, either directly or indirectly, but I think this is something to look more closely at.

Mr. Schmidt is obviously an educated man, possessing a PhD in Electrical Engineering and Computer Science (EECS) from Berkeley, and has held several important positions with companies like Xerox PARCÂ? and Bell LaboratoriesÂ? before his work with Sun Microsystems, first as chief technology officer then as corporate executive officer. When he was appointed CEO of Novell, the company had long since fallen from the dominant position it once had on network operating systems and had been struggling for several years. The eventual merger between Novell and Cambridge Technology Partners forced him out of the position as CEO of the company, but as he fell out of favour, he landed at the feet of two Stanford drop-outs that were under heavy pressure from VC’s to find real leadership.

Google is obviously a very interesting company to work for, and to be pulling all the strings from the top is obviously tough to manage for anyone, but John Dvorak suggests nothing could be harder to manage than Google. When Eric Schmidt first got on board with Google, first as chairman of the board of directors in March 2001 then as the company’s CEO in August of the same year, much of the groundwork for the company’s success had already been put into play. Google had their own unique search based on their PageRank, and the patent for that was granted on September 4th, 2006, just after Schmidt became CEO. More importantly, the Google AdWords service, the current flagship advertising product and main source of revenue for the company, had already been underway for over a year. No matter how difficult the company is to run, almost anyone with management experience would have been able to take the reigns from founders Page and Bryn and make magic happen.

In the years that Google has had Schmidt at the helm, the amount of advertising dollars spent online has increased dramatically. The percent of advertising budgets allocated to adveritsing online has also increased, and these numbers will continue to increase. Initially, bidding wars over words, even trademarked words, would have helped boost the advertising revenue generated. Now, not all words can be bid on, but there are more people advertising online. Not to take away from the job that Schmidt was able to do, taming the unbridled creative energy that Google probably was into something more distinct and tangible, but I’m not sure being able to turn Google into the billion dollar company it is was a miracle in any way. Schmidt is probably unique as an executive, having been heavily involved in reasearch and development himself, and did pioneer the 70-20-10 model that Google operates on and seems to find succes. But, based on the last few releases that I’ve looked at from Google, is Schmidt really harnessing all the potential of Google?

Undoubtedly, if Apple and Sun Microsystems did finally merge and Schmidt did take the lead of the new company, could he really wish for anything better? First, anything has to be easier to manage than Google, right? But really, Apple is probably at the strongest it has ever been, with recent successes including the iMac and iPod. Maintaining the positive growth experienced by Apple as of late should be relatively straight forward given the strength of the people within the company and the creativity and innovation that are the driving force. Sun, on the other hand, is performing so poorly that, almost like Google, anyone with that level of experience should be able to come in and facilitate improvements. The combined companies would give an entirelyÂ? new direction for competing with Microsoft, and although I still believe in the strength of the Dark Side, this definitely will be a concern for the software giant. A company that can compete with them on any playing field, Windows, Linux, or Mac, and has Seattle in their crosshairs is nothing to ignore.

Again,Â? nothing should be takenÂ? away from Mr. Schmidt. He is obviously an educated man who understands not only the business, but also the technology behind it, and that’s an attractive package. I just have to wonder how much of his success is because he’s good, and how much of his success it because he’s good at being lucky.

It might be the saddest news of my short blogging career to have to talk about the fading off of SiliconBeat into the sunset. This morning, when I arrived at work, it was good and bad news at the same time. Not that I crave attention or recognition, but hey, when I get an email from Matt Marshall it means I’m obviously doing something right (and since it was from a third-party emailing company, that something must be getting on some email list, right?). Anyway, long story short, Matt Marshall has gone independent and Michael Bazeley, his partner,Â? will continue to be with the Mercury News. From the email (I removed the links):

Dear friend,

I’m writing to let you be among the first to know about my new Website, VentureBeat — the successor to SiliconBeat.

VentureBeat will focus initially on Silicon Valley, and gradually, when possible, expand to cover innovation hubs around the globe.

VentureBeat’s mission is to provide news and information about private companies and the venture capital that fuels them. People are at the heart of this project. VentureBeat will be a resource for entrepreneurs and other interested professionals facing some the biggest decisions of their careers.

I hope you enjoy VentureBeat. Please visit the site, and read my first post, and let me know what you think. If you’d like to participate, have a view point you think will spark debate, or have other feedback, let me know.

Best regards,

Matt Marshall

For what may well be the final post on SiliconBeat, click here. Good luck to bothÂ? Matt and Michael, and we look forward to reading VentureBeat. Not to be negative here, but is this the first of many blogs to be lost? The bubble may be bursting…

Note:Â? The website has been experiencing some problems and still seems to be down. Tough on the first day, butÂ? don’t worry Matt, we’ll get Om for this!

Don’t think we mentioned the Google and eBay deal that went down earlier this week. It’s an interesting partnership for a few different reasons. The two companies were only just recently being drawn up as rivals, with Google’s Froogle andÂ? Checkout services being in direct competition with eBay and PayPal. eBay did land a deal with Yahoo!,Â? for the American portion of eBay, back in May. That deal obviously wasn’t a Google buster. This newÂ? deal focusses on the International side of eBay, and is said to be something that will move at a slower pace. The problem for eBay is that while they will generate revenue based on their page views, something that had probably been ignored for too long, the impact and benefit of this to them is contingent on the process continuing. Google, on the other hand, can take the information from the partnership and apply it directly to theirÂ? sites and everyÂ? other site they publish on.Â? EBay also increases its reliance on Google and increases the risk of having the rug pulled out from under them. I keep warning people, Google is more like Microsoft and the Dark Side than people think.Â? For eBay, one of the advantages is being able to better utilize Skype and potentially increase the number of users subscribing by adding a useful feature. And it’s amuzing how gTalk is thrown in there. Awe… Check out this post by Marshall Kirkpatrick for more.

While discussing Google, it’s probably worthwhile to weigh in on Eric Schmidt’s new position on the Apple board of directors. It would almost make sense for these two companies to work heavily together based on the the enemy of my enemy is my friend theory alone. But taking this even deeper, Matt Marshall reports:

Both companies share a similar culture. A fierce pride in having talented engineers who know how to do things best, and a coinciding tendency to be excessively secretive — because they think they have all these cool tech projects to hide (which may be true), and this engineering culture then permeates through the whole company.

I personally am not overly fond with either company and find that there’s a certain arrogance in their better-than-Microsoft attitude. Both companies, however, are imortant to the industry as a whole, and regardless of any perceived arrogance, the results for both companies do speak for themselves. Tougher times are ahead for both of these companies.Â? Apple’s iPod line of mp3 players and Google’s impressive search capabilities have felt little, significant competition. As companies start to catch up in the race and come out with their own unique features, these companies will have to ensure their success either through their own new innovations or through the strength of what’s already been done. In tech, although people do display some level of loyalty, it’s definitely a what have you done for me lately attitude. In this case, with such powerful figures aligning, it may be a case ofÂ? what will you do for me. Google maps being available on your iPod video maybe, complete with ads from companies in the area you are looking to find? As always, Paul Kedrosky has a great take on this.

While talking about Paul, I should mention that he has my vote in a recent BusinessWeek poll. The poll is on the “Best of the Web” blogs, and has some heavyweights like TechCrunch, Scobleizer, and Seth’s Blog against, among others, Paul Kedrosky’s Infectious Greed. My vote did go to Paul, supporting a good fellow Canadian kid, but as I mentioned in my comment, Paul is in tough against Mr. Arrington, who is currently in the lead. Get out and vote for your favourite.

While on the topic of supporting Canadians, I should mention Mark Evans and Amber Mac. Marc Evans writes two blogs, or at least two blogs that I’ve stumbled upon. One has been mentioned here before, and that’s Maple Leaf 2.0, and the other we recently found through TheGoodBlogs, that seems to be named Mark Evans. His personal blog seems to be more general, while Maple Leaf seems more specific to 2.0. Amber Mac (I don’t even reallyÂ? know if that’s a full name, but it’s the name of the blog)Â? seems to be an Eastern Canadian that focusses on video media. She worked at G4TechTV for two years and will be finishing up with that company to start her new job with City-TV in Toronto. Not just a pretty face, Amber sports an amazing resume that includes work with CBC-TV Newsworld as a Tech Columnist and Web Strategy Manager for Microsoft Home Magazine. Check out her blog and find out more about the many exciting projects that she’s been a part of and will be bringing to fruition in the near future. What really got me excited was her post about birling down a-down the white water - that’s where the log driver learns to step lightly!

The strongest statement that was made� about my comments on Google Apps� was an email with the subject line: Two words that contained, suprise suprise, two words. Open Office. Open Office was originally StarOffice suite, a collection of software from StarDivision, a German company founded in 1986 by Marco Böries. In the summer of 1999, Sun Microsystems purchased StarDivision for $73.5 million, and with it the StarOffice software.

The number one reason why Sun bought StarDivision in 1999 was because, at the time, Sun had something approaching forty-two thousand employees. Pretty much everyone of them had to have both a Unix workstation and a Windows laptop. And it was cheaper to go buy a company that could make a Solaris and Linux desktop productivity suite than it was to buy forty-two thousand licenses from Microsoft. (Simon Phipps, Sun, LUGradio podcast)

The purchaseÂ? of theÂ? company and subsequent release of StarOffice version 5.2, a free download for personal use, was in direct competition with Microsoft Office. Not only is the product still be offered at a much cheaper price, which also allows the individual liscensing the software to install it on multiple computers, but the whole task of developing and improving the software is based on anÂ? open-source codebase, allowing the community to contribute. You might describe the added benefit of being able to install StarOffice onto a Linux-based computer the cherry on top.

So, of course, I can understand why that comment might be made, and I have to accept that it is a pretty good argument, but there are a few things to consider. One of the first that comes to mind is the fact that it was never even mentioned in any of the reports about Google’s release of Google Apps. When StarOffice 8.0 was released almost a year ago, it was described as the best Office alternative [eWeek.com’s] tested as of yet. If StarOffice is such a strong competitor of Microsoft Office, wouldn’t it be significant enough to mention StarOfficeÂ? whenÂ? discussing the impact that the release of Â? Google Apps will have? Despite the giant that MySpace is, sites like YouTube, Facebook, and BeboÂ? are almost always at least mentioned, and yet StarOffice can’t even get a footnote with this release?

StarOffice, which is OpenOffice with a few extra features and lisenced,Â? is probably a great product, much like WordPerfect Office was a pretty decent product, much like Google’s Apps are probably great. But why is it that these companies don’t make any ground on Microsoft? And I’m not talking a few percent in market share or anything like that, I’m talking a significant piece of the pie. StarOffice has been around for 12 years now.Â? WordPerfect was originally developed for an IBM PCÂ? in 1982. Thirty-sixÂ? years between these two companiesÂ? and still not even worth mentioning with the release of Google Apps. This is a combination of too much credit given to Google and not enough media attention given to the whole story.

Really, I consider this all supporting evidence of my original statement, that the release of Google Apps means nothing. So many companies have entered this arena or been involved in this arena for so many years and still fail to even register as significant players. Google is attempting to put it all online and make it free,Â? but the product has major gaps that will either require some sort of paid upgrade or a different product all together. Microsoft Office, on the other hand, will continue to dominate as the desktop officeÂ? software of choice and add a complimenting online component through their Live.com platform.Â? This will provide the best of both worlds for their users, and more importantly, it will all be under one familiar and trusted roof.

I would never suggest that the release is insignificant, but I would still stress the fact that at this point, people are still putting too much weight into the how much pressure this really places on the main competitor of this release, Microsoft. The significance of this release will be most strongly felt by smaller start-ups that can no longer compete. Paul Kedrosky probably says it best in his post: What makes you think that you can do it so much better than Google can that the inevitable free Google Apps product doesn’t kick your ass out of the office market? Microsoft, on the other hand, is not only well underway with the development of their Live line of products, and is positioned just as well, if not better, to capture the very people that this product targets.

So, who does this product target? Obviously not your major corporations. Any company that needs to maintain any sort of privacy cannot simply rely on this type of third party application. Companies ranging in size from your average mom-and-pop shop or small start-up to mid-sized companies that can’t afford the liscening or at least choose that as one of their cost-cutting initiatives. Putting this into perspective,Â? Steve Bryant says in his post:

Microsoft’s Office market may be $12 billion, but the lion’s share of those billions comes from a relatively small number of large companies. Writely can’t compete with Word, Spreadsheets can’t compete with Excel. They cater to the soccer mom, not the corporate worker.Â?

The question that has to be asked is how do these companies provide for Google in the long term? Google will obviously gain valuable information about these companies that it can use to improve the AdSense program. Not only will Google be watching every move the business makes, ads will be served with these products, which is questionable for any business that is vying for respectability (I always get mad at a colleague of mine that uses Incredimail for just that reason). So these businesses, no matter how well Google Apps works, will probablyÂ? look at alternatives. This would be 1) Upgrading their package with Google, 2) Using one of the few competitors that isn’t Microsoft that survives, 3) Using Microsoft.

Google will undoubtedly force many of the other companies out with this release alone, and when they offer the package upgrades, which is rumoured to be on the way later this year, many more will be weaseled out.Â? Any companies left will probably be reasonable choices, and will probably rely heavily on integrating their services with other, large services. This may even include integration of their services with existing Google Apps clients, thus making the argument to upgrade with them much more compelling. These services will exist and will always have a chance based on people’s strong feelings of resentment towards large companies like Microsoft (and potentially Google, but the company seems to find a way to avoid that kind of scrutiny).

So, why am I so confident in Microsoft? Microsoft has the upper hand, and people seem to forget how much harder it is to gain a customer than keep a customer, and Microsoft has so many different customers toÂ? leverage in this battle.Â? Microsoft already it’s own Office userbase andÂ? has everyone familiar andÂ? adept at using their Office products. Continue to maintain that kind of exposure, and everyone will continue to be able to use their products. Microsoft merely needs to provide seamless integration between their new Office products and the Live initiative. That will automatically provide a huge following for the service and potentially start pulling customers away from Google. Really, if you could combine advantages of the desktop application that Microsoft Office has, and make it easy to, when desired, take advantage of the convenience, etc. of a Web-based suite of office products, it would be the best-of-both-worldsÂ? situation that users look for. The problem for Google is they don’t have both worlds. They exist online.

One of the other huge points with this is Google’s frequent attempts to get a userbase. Google is simply a search engine to a majority of the people that use the site, and while that seems to pay the bills, it’s not the best model for longevity. Users on the Internet need to be channeled, and Google knows that they need to be more than a search engine to ensure they are able to control that channeling. Microsoft has huge followings with their Live Messenger and Live Spaces services. If the results being returned from Microsoft’s search become as relevant to the user as Google’s, why wouldn’t they use it? It will be right there, more easily accessed, and providing the exact same thing, why go to another site?

I said it to open the article and I’ll say it again - it’s not that the release is insignificant, it’s just doesn’t put any new pressure onto Microsoft. Everyone in the industry knew the release was coming, and knows about the releases and integrations to come, from Writely to GDrive. Microsoft’s moves against this have been in place for a long time now, and this shouldn’t change any of it. The only way this release will start putting any added pressure onto Microsoft is when Microsoft makes their online Office release. Then the picture will start to become more clear.Â? For now, with no actual users, probably released as a Beta with several bugs to fix andÂ? important additions to come,Â? Google Apps means nothing.